MGM Executive Discusses Company’s Response After Cyberattack

Recently, two leading gaming, hospitality and entertainment companies, Caesars Entertainment and MGM Resorts International, became cyberattack victims. The cybersecurity issue significantly impacted MGM Resorts’ operations last month, resulting in missing amenities, difficulties with reservations and other issues. As with most such cyberattacks, hackers requested MGM Resorts to pay ransom to which the company did not agree.

Now, in a recent interview with CNBC’s David Faber, Keith Meister, a member of the Board of Directors at MGM Resorts as well as chief investment officer and founder of Corvex Management, spoke about the actions taken by the company in light of the unprecedented security issue. Moreover, he addressed other concerns such as the impact of the cyberattack on the company’s stocks and MGM’s choice not to pay ransom.

Considering the cybersecurity issue, the company’s stock took a dip, an action that according to Meister was premature. “MGM was a plus or minus $50 stock before this happened, so the stock’s gone down about 35% because of this awful event,” he explained.

Earlier this month, MGM confirmed that it anticipates seeing the impact of the cyberattack within its Q3 2023 earnings. At the time, the company said that it anticipates a $100 million dip in adjusted EBITDAR for September in light of the damaging incident. While Meister acknowledged that $100 million is a significant sum, he remained optimistic about MGM’s future and explained: “I promise you this: the effect this has on our (MGM Resorts) future cash flows is way less than 37%.”

The Company’s Response Was Quick and Rational

Speaking about MGM’s actions in light of the devastating cyberattack, Meister said that the company was able to respond swiftly and rationally. He praised its management team and pointed to the operator’s rapid response in light of the cybersecurity issue. Defending MGM’s actions, Meister said: “It’s our job to be good fiduciaries, so if the right business answer was to pay the ransom, I don’t think we would’ve taken a moral position. It was nice and easier that we were on the right side of morality.”

“MGM responded quickly and very, very rationally. Did exactly what you would’ve expected,“

explained Keith Meister

According to the expert, the cyberattack demanded MGM to overhaul its operations, including its technology systems and cybersecurity protocols. Considering that such a change would require investment, it was much easier for the company not to pay the ransom, Meister suggested. The group identified for the attack was Scattered Spider. It is believed that the same hacker group hit MGM’s rival, Caesars Entertainment.