Hackers have claimed responsibility for the cyber issue that seems to have brought down many of the online operations for MGM Resorts.
The multi-billion dollar company on Sunday revealed the issue publicly but hasn’t said much beyond that. Meanwhile, it’s been reported that corporate email and reservation systems were knocked out. And observers say millions of dollars have probably been lost.
On social media, people posted photos and videos of offline slot machines, snaking lines at the registration desk lines and casino staff using clipboards and pencils.
It’s also been reported that the incident might have been enabled through a conversation hackers had with an MGM help desk operator.
And this might not be the only time it’s happened to a large casino company. There are now reports that Caesars Entertainment was hacked and ultimately paid a ransom.
So now, the FBI is involved. Guests and employees have been frustrated. What kind of impact will it have on MGM Resorts, or Las Vegas?
For the company, Casino Life Editor in Chief David McKee lists two huge hits it will likely take outside of lost casino revenue.
"One is the cost to remain remediating everything that the hackers have done and installing new security systems, the old ones having been breached. And secondly, and perhaps more serious, is the loss of market capitalization to the company. And MGM stock since the story broke has been headed in one direction, and that's down. And that's millions, if not 10s of millions of dollars of market capitalization that it's losing by the minute.”
There are many reasons a casino company would be targeted by hackers — and this episode with MGM isn't their first rodeo with attacking the gaming industry — but a big one is the complexity of their high-tech, multi-faceted revenue stream.
"It's [their] many, many points of sale," said McKee. "Not only that, you have an intricate cat's cradle of technologies that are interacting with one another. There's the slot management system, there's a table games management system. There's the retail point-of-sale, restaurants, stores and so on. ATMs have been affected at MGM. It's basically sent MGM back to before, where it began; they're somewhere back in the 1950s, right now, trying to claw their way back to the 21st Century."
Hackers also want the personal information of some 40-odd million MGM Rewards loyalty club members.
"It's a goldmine of data," said McKee. "And if it is lost, that's a huge setback, because companies have loyalty programs not for your benefit, but for their benefit. [They] know who their regular players are, how much they're worth, and how often they're playing, among many other things. And those many other things include all kinds of personal data, everything from your email address to your bank account information, credit card numbers, so on and so forth. So the value to people who are interested in perpetrating identity theft and other forms of malfeasance is obvious. But it's also a huge loss to MGM because what had been proprietary information for them is now up for grabs."
In other gaming news, the resort corridor in Las Vegas is gearing up for November's Formula 1 race, which will take place on Las Vegas Boulevard and other nearby streets. But even with high-cost hotel rooms and race seating, McKee has doubts about the projected economic impact — which, according to his reporting, isn't being quantified or explained by Formula 1, the Las Vegas Convention and Visitors Authority or Applied Analysis.
"I suspect it's going to be a huge disappointment ... simply because of how hyperbolic the economic impact statements were," he said. "Las Vegas was sold on the Grand Prix on the basis of a projected $1.3 billion economic impact. You look at [fellow F1 host cities] Miami or Austin, [their economic impact is] 600 million in those markets, tops. The [2024] Super Bowl will be as much as 700 million, possibly more because of the added appeal of Las Vegas. So I don't think the Grand Prix is going to come anywhere close to what has been predicted for it. ... It seems to be just an arbitrary number that was reached to dazzle the locals."
Guest: David McKee, editor in chief, Casino Life magazine
