The lawsuit in Nevada federal court alleged Caesars Entertainment Inc, Treasure Island LLC, Wynn Resorts Holdings LLC and MGM Resorts International used shared pricing algorithms to set rates instead of making "independent pricing and supply decisions."
Hospitality industry tech company Cendyn Group LLC and its subsidiary Rainmaker Group, which the lawsuit said provides the algorithms, were both also named defendants.
The lawsuit, filed on behalf of a resident of Florida and a resident of Washington state who allege they stayed in defendants' hotel rooms, claimed the group of hotel defendants, using shared data, could "defy supply and demand dynamics" in the hospitality industry.
"Any units listed at prices exceeding the market price would be undercut by competitors and thus stay empty," according to the lawsuit. "A hotel operator with overpriced, empty rooms would eventually go out of business."
In a statement, a spokesperson for MGM Resorts said the allegations against it "are factually inaccurate, and we intend to defend ourselves vigorously against these meritless claims."
Representatives from Cendyn and Wynn declined to comment. Representatives from Treasure Island and Caesars did not immediately respond to messages seeking comment.
The defendants named in the lawsuit control more than two dozen hotels on the Las Vegas Strip, including Caesars Palace, Harrah's, Wynn, MGM Grand, according to the plaintiffs' lawyers at Hagens Berman Sobol Shapiro and Panish Shea Boyle Ravipudi.
"What happens in Vegas will no longer stay in Vegas," Hagens Berman managing partner Steve Berman said in a statement. "We intend to expose the under-the-table deals perpetrated by these Vegas hotels, and we intend to hold them accountable."
The lawsuit said the "Las Vegas Strip," a four-mile entertainment stretch south of Las Vegas, attracts 42 million visitors a year.
The plaintiffs' complaint quotes from a Rainmaker executive and two former employees there, each of whom were identified as a confidential witness. The former executive, according to the complaint, estimated that 90% of the hotels on the Las Vegas strip use the company's products.
Rainmaker "collects confidential price information from each of the hotel operators, and then tells them, through use of various algorithms, how to price," the lawsuit alleged.
The case is Richard Gibson and Heriberto Valiente v. MGM Resorts International et al, U.S. District Court, District of Nevada, No. 2:23-cv-00140.
For plaintiffs: Brian Panish of Panish Shea Boyle Ravipudi, and Steve Berman of Hagens Berman Sobol Shapiro
For defendants: No appearances yet