Las Vegas hotel class-action lawsuit alleges businesses conspired to raise rates on the Strip

Various hotels on the Las Vegas Strip.
(Credit: Kobby Dagan/Shutterstock)

Overview of hotel prices in Las Vegas:

  • Who: Two hotel customers are suing multiple hotel operators on the Las Vega Strip.
  • Why: The plaintiffs allege that the companies entered into an illegal agreement to artificially inflate the prices of their hotel rooms.
  • Where from: The class action lawsuit challenging Las Vegas hotel rates has been filed in federal court in Nevada.

A group of large hotel operators on the Las Vegas Strip have entered into an illegal agreement to artificially inflate hotel room prices above competitive levels, a new class action lawsuit alleges.

Plaintiffs Richard Gibson and Heriberto Valiente filed the class action lawsuit against Caesars Entertainment Inc., Treasure Island LLC, Wynn Resorts Holdings LLC, Rainmaker Group Unlimited Inc and MGM Resorts International in federal court in Nevada on Jan. 25 alleging violations of enforce fair competition laws.

According to the lawsuit, the defendants are responsible for the operation of the vast majority of hotels on the Las Vegas Strip, including well-known hotels such as the Bellagio, Wynn, Caesar’s Palace, MGM Grand and Mandalay Bay.

Instead of competing with each other, hotel operators have replaced their independent pricing and supply decisions with a common set of pricing algorithms that allow them to charge over-competitive prices for their hotel rooms, the lawsuit says.

Tech company provides pricing algorithms to hotel operators, lawsuit alleges

The company that provides the pricing algorithms for hotel operators is the Rainmaker Group, and it is also named as a defendant in the lawsuit.

According to the plaintiffs, the vast majority of hotels on the Las Vegas Strip now use Rainmaker Group’s pricing algorithms.

Hotels provide real-time pricing and information to Rainmaker Group, which the company feeds into its algorithms and then generates predictive, room-specific pricing recommendations that they send back to hotels, according to the lawsuit.

“In a competitive market, every empty hotel room means lost revenue, so a hotel operator would try to fill every hotel room by making concessions or lowering prices,” the lawsuit states.

“By contrast, the hoteliers, on the recommendation of the Rainmaker Group and as an integral part of the conspiracy, kept prices high and some rooms empty, knowing their co-conspirators would not undercut these over-competitive rates.

Plaintiffs seek to represent anyone who has rented a room from January 24, 2019 to date with any operator participating in Rainmaker.

They are suing under the Sherman Act, seeking confirmation of the class action, damages, fees, costs, an injunction barring the corporations from participating in the alleged system and a jury trial.

Meanwhile, a former MGM Resorts International employee is suing the company he worked for, claiming he was discriminated against and fired for not getting it COVID-19 vaccine due to his religious beliefs.

Have you rented a room on the Las Vegas Strip in the last four years? Let us know what you think about this lawsuit in the comments!

Plaintiffs are represented by Brian J. Panish, Rahul Ravipudi and Ian Samson

Panish Shea Boyle Ravipudi LLP and Adam Ellis, Steve W Berman, Stephanie A Verdoia, Rio S Pierce and Hannah K Song von Hagens Berman Sobol Shapiro LLP.

the MGM Class Action is Richard Gibson et al., v. MGM Resorts International, et al., Case No. 2:23-cv-00140 in the United States District Court for the District of Nevada.

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