R. Paul Wilson On: Casinos and Hotels Rigging Prices in Plain Sight

Author: R. Paul Wilson

As the cost-of-living surges worldwide, the price of gambling is rising on multiple fronts. Banking fees, online transaction costs, travel expenses, accommodation rates, dining, and even insurance premiums—all are significantly higher than they were five years ago. But there’s more driving these increases than inflation alone. Major corporations are deploying deceptive tactics, skirting regulations, and intentionally blocking consumers from finding true value, all while colluding to sidestep genuine competition. In my opinion, we’re being scammed.

Historically, Las Vegas has set the gold standard for the global gambling industry, enticing players worldwide with the promise of unmatched experiences. But since corporate giants took control of Sin City, the game has changed. Gone are the days of free steak dinners, easily comped rooms, and casino hosts offering hospitality on a mere hunch that you or I might be a future high roller.

Now, stingy accounting and calculated algorithms dole out miserly rewards to the average player—but at least the bad old days of crooked dealers busting out players, pit bosses rigging decks, or waitresses slipping a Mickey to overly lucky gamblers are over, right? As it turns out, today’s casino operators have simply found more profitable, less overt ways to rip off their patrons.

The Shoeshine Conspiracy: Do Hotels Fix Prices?

I’ve previously highlighted the jaw-dropping prices for even basic purchases on the Las Vegas Strip—from nearly ninety dollars for a few snacks and drinks at an off-strip hotel to parking and resort fees that make a simple stay prohibitive for many. The question that looms is: how has this climate of inflated pricing and unfavorable odds come about without at least one major brick-and-mortar casino and hotel breaking rank to foster competition?

This isn’t just a Vegas issue. Across North America—and beyond—the hospitality sector has been caught up in a sweeping trend of price-fixing to ensure that rising costs translate directly to rising profits, and the Department of Justice (DOJ) is paying attention.

Legally, it’s deemed an unfair practice for companies to meet and openly agree on service pricing because it allows an entire sector to elevate fees without the risk of losing ground to competitors. But imagine this: what if a hotel CFO casually inquired about optimal pricing strategies from, say, a local shoeshine vendor—who, in turn, was having the same “casual” chat with other hotel CFOs and providing advice that conveniently aligned with their collective best interests? Would that be illegal?

In other words, is it still collusion if you consult a third party to gather intel on your so-called competitors while merely paying for a “shoeshine”? Absolutely. The real challenge lies in prosecuting or even preventing it. Unlike in Leslie Nielsen’s comedic “Police Squad,” there’s no shoeshine guy serving as a paid informant to both sides. Today, data analysis services have taken over, and the name for their influence on the market is “Algorithmic Collusion.” Here’s how it works:

Algorithmic collusion represents a new frontier in price-fixing, where complex software—rather than explicit agreements—drives synchronized price hikes across competing businesses. In the hospitality sector, this approach has emerged as a sophisticated method for hotel chains to bypass traditional antitrust laws without any direct communication. Instead of colluding openly, hotels employ data analysis and pricing software that tracks competitors’ rates in real time, using predictive algorithms to ensure all players maintain similarly inflated pricing structures.

The recent DOJ case sheds light on the growing use of companies like Cendyn and SRT to facilitate this form of digital coordination. These firms provide data-driven solutions that analyze the market and recommend price adjustments not only to maximize revenue but to prevent any single player from undercutting the others. As a result, consumers find themselves locked into universally higher prices, with little chance of suffering genuine competition from lower rates.

By employing algorithmic tools that “coincidentally” lead to identical pricing patterns, the hospitality industry can achieve a form of unspoken agreement. This practice stretches the definition of competition and is a direct response to traditional anti-collusion laws, creating a digital ‘backroom’ where algorithms play puppeteers, pulling the strings of prices across the sector.

Luxury or Lunacy? When Hotels Charge for Air

This coordinated surge in pricing and fees has enabled the hospitality sector to maintain, and even increase, profits despite a drop in visitor numbers—a revealing indicator of just how steeply prices have risen across the board. In recent years, the average revenue per available room (RevPAR), a key metric in hospitality, has climbed significantly. For instance, U.S. hotels reported a 15% increase in RevPAR from 2019 to 2023, despite the fact that overall occupancy rates have not fully returned to pre-pandemic levels.

Industry leaders openly acknowledge this strategy, with some stating they prefer a smaller, higher-paying clientele, cloaked in corporate platitudes about “enhancing the overall experience.” In my view, it’s clear—these operators are pricing out the middle market while sustaining their profit margins, because so far, that middle ground has been willing (or forced) to keep up with the escalating costs.

In the high-stakes world of hustlers and grifters, this is how a clip joint is run: charging through the nose for every conceivable service, from basic drinks to “resort” fees, and eventually (one assumes) premium air-conditioning! It’s a well-oiled operation to drain wallets with a ruthless efficiency, ensuring that every last cent is extracted from customers as quickly and completely as possible.

Frustratingly, this strategy strikes me as a short-term win that’s bound to have long-term consequences. As average travelers and players begin to feel fleeced by these aggressive, nickel-and-dime tactics, they’re likely to take their money elsewhere—online, or to destinations less relentless in draining every dollar of disposable income. Once this so-called “common herd” moves on, abandoning a destination, even the business travelers and affluent elites will eventually follow. After all, when the buzz of the crowd fades and that Vegas atmosphere dwindles, there’s little appeal left, especially for those who enjoy feeling a few steps above the rest.

Meanwhile, we need to ask ourselves: which other sectors might be pulling the same tricks?

How Airlines Keep Fares Sky-High

Airlines are a glaring example of this hustle, particularly when budget carriers aren’t around to keep prices in check. Flying in or out of airports dominated by big-name airlines is often far pricier than choosing airports with broader competition, as price-sensitive travelers will tell you. The catch? Many major airports across the U.S. have “dedicated,” branded gates reserved exclusively for large carriers, effectively shutting out budget airlines and ensuring no competition can creep in to offer a cheaper option.

This strategy isn’t universal, though. Several U.S. airports have opted for a more flexible, European-style approach, where check-in, gate access, and luggage handling are managed by airport staff or shared based on the flight schedule, not by dedicated branding. This setup allows for greater competition, keeping fares more accessible to budget travelers. Las Vegas’s Harry Reid Airport, for instance, welcomes a range of airlines with no intention of limiting cheap flights, leaving travelers a bit more to spend on other indulgences (before they’re stung with inflated hotel fees and paltry player rewards).

The reality is this: smart gambling is about strategically managing your bankroll—where, when, and how much to play. But when that bankroll is being siphoned off in every direction before you even hit the tables, you’re getting fleeced. It might lack the flashy thrill of a street scam, but as a calculated corporate play, this approach is costing players as much as strolling through a pickpocket convention.