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The Double Down: MGM Addresses Hacks, Estimates $100M Negative Impact

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2023-10-09

The Double Down: MGM Addresses Hacks, Estimates $100M Negative Impact

The reels are always spinning in the gambling industry, and “The Double Down” is here every Friday to catch you up on all of the week’s biggest news. Sports Handle’s “Get a Grip” rounds up everything on the sports betting side, and US Bets provides the best of the rest: brick-and-mortar happenings, online casino developments, poker headlines, horse wagering, and more. So pull up a chair, crunch the numbers, and slide forward another stack of chips.

Hornbuckle: ‘This attack is contained’

It would be an exaggeration to say MGM Resorts International “broke its silence” Thursday regarding September’s massive cyberattack, as the company did post a handful of updates on social media (since deleted) following the hack.

But it’s fair to say MGM substantially eased its tight-lipped approach Thursday, with both a public letter from President and CEO Bill Hornbuckle to customers and a filing with the U.S. Securities and Exchange Commission addressing the financial damage of the attack.

Hornbuckle’s letter, as one would expect, attempts to put a relatively positive spin on the situation.

“While we experienced disruptions at some of our properties,” he wrote, “operations at our affected properties have returned to normal, and the vast majority of our systems have been restored. We also believe that this attack is contained.”

Though MGM (along with fellow hack victim Caesars) is facing several lawsuits filed by customers over the data breach, Hornbuckle insisted that “because of our fast, early response, the incident did not result in a compromise of any customer bank account numbers or payment card information.”

He acknowledged that the hackers obtained “some personal information” specifically on customers in the system prior to March 2019, and said that a “limited number of Social Security numbers and passport numbers were obtained. We have no evidence that the criminal actors have used this data to commit identity theft or account fraud.”

Hornbuckle proceeded to apologize to customers, thank them for their “loyalty and patience,” and provide helplines for those impacted.

If the letter to customers can be seen as damage control, the SEC filing is a more numerically revealing article of damage assessment.

“The Company believes that the operational disruption experienced at its affected properties during the month of September will have a negative impact on its third quarter 2023 results, predominantly in its Las Vegas operations, and a minimal impact during the fourth quarter,” MGM wrote in its Form 8-K filing. “Specifically, the Company estimates a negative impact from the cyber security issue in September of approximately $100 million to Adjusted Property EBITDAR for the Las Vegas Strip Resorts and Regional Operations, collectively.”

The filing proceeded to spell out that room occupancy in September slipped year-over-year from 93% to 88%, but MGM still expects “record results” in November with the Formula 1 race descending upon Las Vegas. It also said MGM incurred less than $10 million in one-time expenses from the breach.

This is surely not the final chapter in this major casino industry news story, but a little transparency and communication goes a long way in moving the narrative along.

This week on Gamble On …

Every Thursday, US Bets drops a new episode of the Gamble On podcast, and this week’s welcomed DFS pro Drew Dinkmeyer to talk about his annual Welly Maker charity drive, the NBA championship futures market, and what he uses sims for:

Sims have shifted the landscape in DFS, and on the latest episode of #GambleOn, @DrewDinkmeyer explains the Vizzini-with-the-iocane-powder thinking required to take full advantage: https://t.co/rctUGL97lI pic.twitter.com/zPJgddrkhB

— US Bets (@US_Bets) October 6, 2023

Glass half full

Gaming Industry Outlook Mildly Upbeat As Growth Slows Slightly

Virginia is for gamblers

Could A Casino Come To Northern Virginia?

North Carolina is for gamblers, too

What’s Next For Gambling Expansion Efforts In North Carolina?

Motown movement

Detroit Casino Workers Approve Strike Authorization

What can 10 cents buy you?

DraftKings Casino Pays Out $2.2M On Progressive Online Jackpot

Keystone casino competition

Pennsylvania Casinos, Already Pressured By Competition, Worry About More Of It

Pace-O-Matic Pleads Case To Have Its Skill Games Permitted In Pennsylvania

Michigamblin’ online

New Online Slots Coming To Michigan Via Light & Wonder And Playzido

Authentic Gaming To Make North American Debut In Michigan With Live Dealer Games

Buckeye backslide

Ohio’s Casinos, Racinos Suffered Downward Revenue Trend In August

On a horse …

Oklahoma The Only State To Adopt Category 1 Horse Racing Interference Rules

… With no name

Legislation Would Let All Michigan Lottery Winners Stay Anonymous

Maryland casinos generate $155M in September revenue

Maryland’s six casinos generated $155.1 million in revenue in September, the Maryland Lottery announced Thursday. The 2023 September total is a 2.6% decrease from the same time period in 2022.

MGM National Harbor ($62 million) and Live! Casino & Hotel ($58.4 million) brought in the majority of September revenue. The two casinos are the only ones in Maryland with at least 2,000 slot machines and 150 table games. Horseshoe Casino ($14.5 million) was the only other casino to generate at least $10 million in revenue in September.

Despite the properties combining for a dip in year-over-year September revenue, they still generated $66.4 million in monthly tax revenue for the state.

— Bennett Conlin

New York cracks down on crooked horse trainers

Amid revelations that certain racehorse trainers in New York have either been underpaying or stiffing their backstretch employees, many of whom are in the United States on work visas and toil for extremely modest wages, Gaming Commission Chairman Brian O’Dwyer has announced a partnership with the state’s Department of Labor to hold scofflaws’ feet to the fire.

“A trainer was recently ordered by the U.S. District Court to pay hundreds of thousands of dollars in back wages, fines, and penalties,” O’Dwyer said in an obvious reference to the Hall-of-Fame trainer Steve Asmussen, who has stated that he disagrees with the state’s math. “This is not the first time that this trainer and his stable have been ordered to pay back wages, damages, and fines due to federal labor law violations. Accordingly, the commission requested the trainer provide appropriate employment records as part of its review. The commission also requested the trainer explain why he believes he continues to meet New York State’s standards for licensure. We are reviewing his response.

“To promptly identify any licensees engaging in bad labor practices, we’ve forged a partnership with the NYS Department of Labor so that the Commission is notified when complaints regarding a trainer’s business practices spur an investigation. This bridges the regulatory gap so that when we learn of trainers engaged in practices that shortchange their employees, we can consider action regarding the trainers’ licensure.”

— Mike Seely

More from around the gambling biz

UNLUCKY SPIN: Rogue roulette ball hits gambler in eye at off-Strip casino, lawsuit alleges [Las Vegas Review-Journal]

N.O. BIG DEAL: See inside $435M Caesars New Orleans conversion project [New Orleans City Business]

LOCAL VS. GLOBAL: Analyst keen on Vegas, gloomier elsewhere [CDC Gaming Reports]

INNOVATION STATION: Station Casinos launches updated app for guests [Las Vegas Review-Journal]

RED FLAG RAISED: Company behind Richmond casino noncompliant with financial filing requirements [WTVR.com]

CORNHUSKER COEXISTENCE: Casinos’ effect on other gambling in Nebraska appears mixed [Lincoln Journal Star]

COUNTER SUIT: Ameristar Casino sued by card counter after police detainment [KDVR.com]

Image: Blundell Design

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