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A federal appeals court on Wednesday reinstated a proposed class action accusing major Atlantic City casino operators of using an AI-driven revenue management system to coordinate hotel room rates and overcharge guests.
Reuters reported that the 3rd US Circuit Court of Appeals in Philadelphia found that plaintiffs presented sufficient grounds for their claims to proceed under federal antitrust law. The decision departs from an August 2025 ruling by the 9th US Circuit Court of Appeals in San Francisco, which dismissed a comparable lawsuit brought by casino customers in Nevada.
The divergence sets up a split between the two circuits on how antitrust law applies to AI-assisted pricing tools.
According to the complaint, hotel owners submitted real-time pricing and occupancy figures to Rainmaker, a platform developed by software maker Cendyn. The system applied AI-assisted algorithms to generate pricing recommendations for participating properties.
US District Judge Karen Williams had dismissed the case in October 2024, ruling that plaintiffs did not adequately demonstrate how the New Jersey hotels used the allegedly confidential data once it reached Cendyn.
However, the 3rd Circuit panel determined that plaintiffs should have the opportunity to obtain technical evidence regarding the software’s function. In its opinion, the panel wrote, “AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other.”
Christopher Cormier, an attorney for the plaintiffs at Burns Charest, said the ruling “applies established legal principles in a common-sense way to modern technologies that have the capacity to cause widespread harm to competition and consumers across vital segments of the economy.”