Operator News
US – Cyber attack costing MGM between $4.2m and $8.4m in daily revenue
By Phil - 19 September 2023
David Katz, an equity analyst with New York-based Jefferies Group, has said that the cyber attack currently affecting MGM Resorts could be costing the operator between $4.2m and $8.4m in daily revenue.
He believes that MGM could be taking a 10 to 20 per cent revenue hit ‘for the days that the current conditions exist.’”’
Now in its second week of the attack, MGM usually makes about $42m in revenue and $8m in cash flow each day. The daily cash flow could be being hit for around $1m a day.
Mr Katz said: “The announcement by Caesars Entertainment, which reported a similar cyberattack in an SEC filing Thursday, and indications from MGM confirming the cyberattacks should be taken as one-time, largely insurable events that should not have long-lasting impacts on the businesses, assuming that the event is short-lived. Our sense is that MGM’s impact could potentially be material but moderate near term, while CZR should see no meaningful impact and the question of whether any business is displaced among operators near term is fair.”
“Our impression is the Street’s presumption that CZR elected to pay a ransom while MGM did not may not be correct, according to our discussions with both management teams,” Katz wrote. “Nonetheless, given what we expect should be predominantly insurable events for all concerned should mitigate the impact to MGM if it turns out to be significant.
For the time being, it is not clear what the magnitude of the impact is to MGM and the degree of insurance coverage it will have or the duration of the event. Our impression of the impact to MGM is that business remains operable and credit card use is possible, albeit manual, while more transactions are cash-based than usual,” Mr Katz added.
