Investing.com -- A federal appeals court on Wednesday allowed a proposed class action lawsuit against major Atlantic City casino operators to move forward. The lawsuit claims the companies used artificial intelligence software to coordinate room prices and overcharge customers.

The plaintiffs said hotel owners provided internal data, including real-time pricing and occupancy information, to software maker Cendyn's platform called Rainmaker. The platform used AI algorithms to create pricing recommendations.

The 3rd U.S. Circuit Court of Appeals in Philadelphia ruled the claims were adequate to proceed under federal antitrust law. The decision differs from an August 2025 ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals, which dismissed a similar lawsuit from casino customers in Nevada.

U.S. District Judge Karen Williams had dismissed the case in October 2024, finding the plaintiffs did not demonstrate how the New Jersey hotels used the confidential data after providing it to Cendyn.

The 3rd Circuit panel said the plaintiffs should be allowed to collect technical evidence about the software. "AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other," the court wrote.

The case involves Caesars Entertainment, MGM Resorts, and Hard Rock.