MGM Resorts loses an estimated $4.2 million to $8.4 million in revenue each day that the ongoing cyber attack continues. [Image: Shutterstock.com]
Hit where it hurts
MGM Resorts International is still dealing with a cyberattack that affected its Las Vegas operations. One gaming industry analyst has now estimated that it costs the casino company between $4.2 million and $8.4 million in revenue per day, in addition to about $1 million in lost cash flow.
Compensation resulting from a cyber attack can be claimed against insurance
In a report to investors, David Katz, an equity analyst at Jefferies Group, explained how MGM is handling cash flow and revenues that range between 10% to 20% per day. However, he noted that an unspecified amount of damage resulting from the cyber attack will be claimed against the insurance. Katz believes the attack will not have a long-term negative impact on the overall business, assuming there is a solution in the near future.
MGM’s annual revenue for its global operations in 2022 was about $13.1 billion, so the current turmoil in Las Vegas is not putting a significant strain on its finances. The company announced on Friday that some computer systems remain under siege, but confirmed that “the vast majority of our real estate offerings are currently still operational.”
The disruption caused by the cyberattack affected all aspects of MGM’s operations, including investors, owners, employees and customers. The company’s share price has fallen by about 6% since the start of the attack, while there have also reportedly been disruptions to payroll systems. MGM is the largest employer in Nevada.
There is uncertainty about some of the conventions being held this week at MGM properties, including Groceryshop 2023. Attendance for the event will be about 5,000 people and will be held between Tuesday and Thursday.
Customers are still unable to use the MGM website to make reservations or manage existing reservations, and instead must contact the property directly or engage with third-party websites. Many slot machines at MGM properties are still out of order and employees need to pay out winnings manually because the ticket system is not working properly. People cannot check into their rooms remotely, while payment issues persist at bars and restaurants.
Chaos in Las Vegas
The ransomware hackers allegedly gained access to MGM’s systems by impersonating an employee in a ten-minute phone call to the help desk. ALPHV claimed responsibility for the attack last weekend. The hacker group said it is still able to access some of MGM’s infrastructure, and still has the potential to carry out more attacks if the company does not contact it.
Many other casinos suffered from slots outages in Las Vegas
Over the weekend, several other casinos suffered slot machine outages in Las Vegas. This included both Harrah’s Las Vegas, operated by Caesars Entertainment, and The Venetian Resort Las Vegas, operated by Apollo Global Management. It is unclear whether these issues are related to the MGM hack.
Caesars already suffered a cyberattack in late August at the hands of ALPHV, for which it reportedly paid millions in ransom. This has been kept largely secret. It is unclear whether MGM Resorts is considering paying a ransom.
Some other Las Vegas companies are trying to capitalize on the turmoil at MGM properties. Larry Flynt’s Hustler Club is offering free dances to people affected by the cyber attack. The club also offers free airport pick-up and luggage storage.