A federal lawsuit was filed in U.S. District Court in Las Vegas on Wednesday, January 26, which alleges that Las Vegas Strip resorts used an outside vendor to fix hotel room prices beginning in 2019.
According to an article written by Ken Ritter on WPXI.com, the outside vendor accused of using “algorithmic-driven price-fixing … at the expense of consumers and in violation of antitrust laws,” is Rainmaker Group Unlimited. They are a revenue management group owned by a company based in Boca Raton, Florida named Cendyn Group.
Per Ritter’s article, “[t]he lawsuit was filed on behalf of plaintiffs Richard Gibson and Heriberto Valiente by attorneys from the law firm of Hagens Berman Sobol Shapiro in Seattle and Berkeley, California. They are hoping to end up making this a class action lawsuit seeking unspecified monetary damages. They are basing their allegations on what they believe are “antitrust violations of the federal Sherman Act” by Las Vegas Strip resorts.
So, what is an algorithm, and how does it apply in this lawsuit? Ritter’s article explains the lawsuit identifies information in a 2017 speech by Maureen Ohlhaussen, a former Federal Trade Commission acting chairperson. In her speech, she “defined a computer algorithm as a set of rules or instructions that can model thousands of ‘extremely complex and nuanced behaviors’ in a fraction of a second ‘and react almost instantaneously to changes.’”
The Las Vegas Review-Journal was sourced in Ken Ritter’s article as reporting: “that average daily room rates for Strip resorts hit record highs in 2022, topping $200 a night in October during a busy convention month.” The Review-Journal went on to report that the average room rate in our city was the highest in history through November 2022, at 175.40 per night.
Las Vegas Strip resort companies which were identified in the lawsuit in this alleged hotel room price fixing conspiracy include MGM Resorts International, Caesars Entertainment, Wynn Resorts, and Treasure Island. If the lawsuit is successful, it will negatively affect their profit margins, and I am sure these casino giants will fight it with everything they have. Stay tuned…
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Larry Martino is the long-time Afternoon Drive personality on 96.3 KKLZ. The views and opinions expressed in this blog are those of Larry Martino and not necessarily those of Beasley Media Group, LLC.