MGM Resorts International will invest up to $40 million to improve its cybersecurity and does not expect any further operational disruptions from a recent cyberattack, its top executive said Wednesday as the casino operator reported a turnaround in profit in the third quarter.
On a call with analysts to discuss its quarterly results, MGM CEO and President William Hornbuckle also called out the “staggering” rise in insurance costs since 2019.
Since 2019, the cost of insurance for its Las Vegas properties, including cyber and other coverage, has doubled, while its insurance spend for its regional casinos has increased four-fold, Mr. Hornbuckle said.
MGM said last month it expected a $100 million hit to its third-quarter results after a cyberattack disrupted its operations, forcing it to shut down its systems.
“Following the issues, we have seen incredible resilience in our business to start the fourth quarter going forward,” and insurance will cover the losses incurred, Mr. Hornbuckle said on the earnings call.
The cybersecurity issue is not expected to have a material effect on its financial condition and results, MGM said Wednesday in a 10-Q filing with the Securities and Exchange Commission. “The full scope of the costs and related impacts of this issue have not been determined,” MGM said in the filing.
The company has done a lot to lock down its systems since the attack but will look at its information technology architecture and how it’s designed and how it goes forward, Mr. Hornbuckle said in response to an analyst’s question on the earnings call. “We’re probably looking at some time into next year a $30 million or $40 million capitalization,” he said.
MGM reported $3.97 billion in consolidated revenues in the quarter, up 16% from $3.42 billion in the year-earlier period as it benefited from a post-pandemic travel rebound in China and Macau.
Net income totaled $161 million, a turnaround from a net loss of $577 million in the year-earlier period.