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MGM loses millions daily due to cyberattack

September 19, 2023 World Casino & HotelCrime & Legal

An analyst at Jefferies estimates that MGM Resorts is losing between $4.2 million and $8.4 million in daily revenue and $1 million in daily cash flow due to recent intrusions on its casino and hospitality operations in the United States.

MGM’s Las Vegas property website is currently unavailable for reservations due to ongoing intrusions, which have now entered their second week. The company has been offering free cancellations or modifications to consumers, initially intending to terminate this option on Sunday.

The prolonged disruption caused by the cyberattack, which has been attributed to the criminal group BlackCat, has made it difficult for gamblers to withdraw their winnings.

While the analyst believes that MGM could experience a 10% to 20% decline in revenue and cash flow if the current conditions persist, the precise extent of insurance coverage for cyberattack damages remains ambiguous.

The analyst, David Katz, observed that MGM has stated that these cyberattacks should be viewed as one-time, primarily insurable events with no long-term impact on the business, presuming that the events are temporary.

In comparison to a recent cyberattack on fellow Las Vegas gambling operator Caesars Entertainment, which reportedly paid approximately $15 million to hackers to regain control of its systems, Katz suggested that MGM’s immediate impact could be significant but moderate. Meanwhile, he anticipates that Caesars Entertainment will experience no significant impact, and the short-term business displacement among operators remains uncertain.

Uncertain is whether MGM paid the ransom demanded by the cyberattackers. Cyberattacks can have significant financial repercussions on the gaming industry, highlighting the need for comprehensive cybersecurity measures and response strategies.

Original story by: Asia Gaming Brief

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