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In a recent cybersecurity breach, Caesars Entertainment Inc. (NYSE:CZR) reportedly paid millions to cyber attackers to prevent the leak of company data.
The fallout of this incident has led to a substantial drop in the company’s share prices.
What Happened: Caesars Entertainment reportedly paid a hefty sum to a group of hackers called “Scattered Spider” or “UNC 3944,” according to Bloomberg. The cyber attackers managed to breach the company’s systems via an external IT vendor’s network.
Following the revelation of this attack, the company’s shares plummeted by 3.5% on Wednesday.
The company is expected to officially disclose details of the attack in an upcoming regulatory filing.
This news surfaced alongside another cyberattack on MGM Resorts International (NYSE:MGM), disrupting operations and causing a 5% drop in its shares this week. The attack on MGM Resorts also affected digital room keys, slot machines and online reservation systems.
Moody’s Investors Service has deemed the incident “credit negative” for MGM Resorts, underlining the perils of heavy reliance on technology in the casino business.
Why It Matters: The recent ransomware attack on Caesars Entertainment and the similar breach at MGM Resorts have highlighted the vulnerability of the casino industry to cyberattacks.
David Kennedy, CEO of TrustedSec, a cybersecurity firm, expressed his lack of surprise at the MGM hack, citing the inadequate cybersecurity budgets that plague many casinos. The use of “flat” IT infrastructure in these establishments makes them susceptible to hackers infiltrating accounting systems and accessing customer credit card records.
Brett Callow, a threat analyst at Emsisoft, further highlighted that casinos present ripe opportunities for ransomware operators. With Nevada alone hosting 296 casinos and raking in a staggering $26 billion in total revenues last year, it’s not surprising cybercriminals are drawn to this lucrative pot of gold.
The ETFMG Prime Cyber Security ETF (NYSE:HACK), which among its top holdings has Splunk Inc. (NASDAQ:SPLK) and Okta Inc (NASDAQ:OKTA), is up 18% year to date.
Read Next: A fine wine index called Liv-ex Fine Wine 1000 GREW in value during the Great Recession. Premium liquor has been moving to the beat of its own drum. Click here to invest in curated casks/collections.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock
