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MGM and Caesars face federal investigations

25 April 2024

The Federal Trade Commission is looking at MGM's handling of last year's cyber attacks. Plus, the Department of Justice is looking at the possibility that Caesars colluded with other hotel operators to fix prices.

MGM Resorts and Caesars Entertainment are facing separate federal investigations in Las Vegas and Atlantic City.

The Las Vegas cyber attacks last year were some of the most costly for business, which some believe we can see in price hikes. The MGM hacking was devastating, while the Caesars hacking was paid off.

The cyber attacks in Vegas last year are back in the news, as an MGM suit against the Federal Trade Commission has been filed over its investigation into the matter. Those attacks crippled Caesars and MGM properties, and the suit filed in Washington federal court targets both the FTC and Lina Khan, the FTC chair. The MGM suit is pursuing “injunctive and declaratory relief” against the FTC. They allege that that the actions taken by the FTC and Khan have infringed upon their rights as guaranteed by the due process clause of the Fifth Amendment. This clause mandates that entities subject to governmental actions are entitled to a hearing before an impartial tribunal. It also ensures equitable treatment under the law.

The Federal Trade Commission and the Justice Department’s Antitrust Division have submitted a hotel price fixing statement to the District of New Jersey. It was filed in the ongoing case of Cornish-Adebiyi v. Caesars Entertainment, as announced earlier this month. This case revolves around the utilization of pricing algorithms by casino hotels, a practice that is increasingly drawing regulatory attention. In their statement, the agencies address hotel price fixing, and clarify that hotels cannot collaborate on setting room prices or employ algorithms to carry out actions that would be considered illegal if performed by individuals. The spotlight has been on price-setting algorithms as more hotels adopt technology to assist in pricing decisions. However, recent legal actions suggest that some of these platforms may be involved in illicit price-fixing activities.