Ransomware attack will lower MGM Q3 earnings by $100 million

According to MGM Resorts International, a recent cyberattack on its North American operations would reduce its Adjusted EBITDAR by almost $100 million in September. Customer data comprising gender, date of birth, driver’s licence numbers for purchases made before 2019 and, for a smaller group, Social Security numbers and passport numbers were compromised as a consequence of the incident, which took place on September 12.

Initial targets of the hack were MGM’s website and email systems, but it rapidly spread to offline slot machines at hotels along the Las Vegas Strip, the Borgata in Atlantic City, and MGM Northfield in Ohio. The majority of purchases were made in cash owing to unavailable credit card terminals, and guests experienced inconveniences including locked hotel rooms.

MGM anticipates that the interruption will have a negative effect on its 3Q23 earnings, principally on operations in Las Vegas, with a negligible effect in the fourth quarter. This includes a $100 million blow to Adjusted EBITDAR for September and about $10 million in cybersecurity-related one-time costs for Q3, including technology consulting services and legal costs.

Despite the setback, MGM expects a solid fourth quarter, powered by Formula 1. October occupancy is predicted to return to 93%, while November statistics for Las Vegas Strip Resorts are predicted to smash records. The business doesn’t think that any client passwords, bank account numbers, or payment card data were accessed, and it also doesn’t think that the information gathered was utilised to commit identity theft or account fraud.

MGM guarantees that most guest-facing systems at its domestic hotels have been restored, and it is still working to restore the other afflicted systems. This incident comes after a hack on MGM Resorts in 2019 that revealed the private information of more than 10 million visitors. This cybersecurity breach has been labelled “credit negative” for MGM by Moody’s Investors Service, indicating operational concerns.

Original story by: IAG