MGM Resorts Faces Significant Losses Following September Cyberattack
MGM Resorts Grapples with Aftermath of Data Breach
MGM Resorts International is currently dealing with the consequences of a major data breach that occurred in September. The cyberattack resulted in the temporary shutdown of the company’s U.S. casino systems, including those in Las Vegas Strip resorts. Over the course of nine days, operations were disrupted across the company’s 36,000 hotel rooms and regional properties. MGM Resorts CEO, Bill Hornbuckle, referred to the attack as “corporate terrorism.”
The Extent of the Attack
During a recent speech at the Global Gaming Expo at The Venetian, Hornbuckle provided insight into the socially engineered attack. Despite early detection and immediate actions to protect data by shutting down systems, the hackers were able to disable all remaining systems. While personal customer data was stolen, no financial information was compromised. MGM Resorts has reassured affected customers that they will receive free identity protection and credit monitoring services.
Financial Impact and Legal Consequences
MGM Resorts International has a market capitalization of $13.08 billion, according to InvestingPro’s real-time metrics. However, the company’s stock has experienced volatility, with a 15% drop in the last month. MGM’s P/E ratio is currently at 38.41, indicating that it is trading at a high earnings multiple. Additional legal and consulting expenses related to the data breach are expected to cost over $100 million and will negatively affect MGM’s Q3 results. Despite this, MGM has chosen not to pay any ransom demands, unlike Caesars Entertainment.
Similarities with Other Attacks
MGM Resorts and Caesars Entertainment are both now facing federal lawsuits in relation to their respective data breaches. The MGM breach has drawn comparisons to Norsk Hydro’s 2019 ransomware attack, potentially making it the costliest on record. Cybersecurity expert Brett Callow from Emsisoft has highlighted these similarities.
Implications for the Casino Industry and Beyond
Hornbuckle remains optimistic about upcoming events, such as the Formula One Las Vegas Grand Prix, despite the setbacks caused by the data breach. This incident serves as a stark reminder of the increasing threat of cyberattacks to corporations across various sectors. Clorox recently reported a cyberattack, causing operational disruptions and product shortages that are projected to lead to a significant drop in sales for Q1 2024.
MGM’s Management and Future Outlook
InvestingPro Tips highlight MGM’s management’s aggressive share buybacks and strong earnings, which should allow for continued dividend payments. For more detailed metrics and tips about companies like MGM, readers can refer to InvestingPro.
This article was written with the support of an editor and contains no external references.
