Wynn Resorts and Caesars Entertainment Win Legal Victory Over Dynamic Pricing Lawsuit

Wynn Resorts and Caesars Entertainment have won a legal victory on the use of dynamic pricing, as the US Court of Appeals for the Ninth Circuit affirmed the dismissal of a class action lawsuit. The suit alleged that the companies engaged in deceptive pricing practices, but the court ruled in favor of the hospitality players. This is a notable legal victory for Wynn Resorts and Caesars Entertainment, as it allows them to continue using dynamic pricing in their businesses.

Wynn Resorts (NASDAQ: WYNN) and Caesars Entertainment (NASDAQ: CZR) have secured a significant legal victory after the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a class action lawsuit. The suit alleged that the companies violated antitrust laws by coordinating to raise hotel room rates on the Las Vegas Strip through the use of shared revenue management software platforms, including those provided by Cendyn Group and its subsidiary, Rainmaker [1].

The court ruled that the plaintiffs failed to establish a sufficient antitrust claim, emphasizing that the use of common pricing software did not constitute evidence of an illegal agreement to fix prices. The judges noted that merely contracting with the same service provider and subsequently seeing higher prices is not enough to prove a conspiracy or restraint of trade under Section 1 of the Sherman Act [2]. The decision highlighted that a shift in business strategy from maximizing occupancy to maximizing profitability via higher rates was not inherently anticompetitive or unlawful.

This legal victory is a significant win for the resort industry and could set a tough precedent for future class actions seeking to challenge dynamic pricing or algorithm-driven rate recommendations in the hospitality sector. Wynn Resorts and Caesars Entertainment traded slightly lower in premarket action on Monday following the ruling [1].

References:
[1] https://seekingalpha.com/news/4486466-wynn-resorts-and-caesars-entertainment-win-legal-victory-on-the-use-of-dynamic-pricing
[2] https://caselaw.findlaw.com/court/us-9th-circuit/117607364.html