A largely positive 2023 recap for MGM Resorts International was slightly muted by the lingering negative impact from the Detroit casino workers’ strike.
The company’s regional operations were down 12% in Q4 of 2023, with the company attributing a large share of those losses to the strike.
Casino workers at the MGM Grand Detroit were on strike for 47 days during Q4 for the company, resulting in around $30 million in revenue losses at that time.
The strike delivered a blow for all Detroit casinos, none more felt than at MGM Grand Detroit.
Detroit strike contributes to regional losses for MGM
MGM Resorts International held their 2023 Q4 and yearly recap call for investors on Tuesday night.
While the company reported overall Q4 year-over-year growth of 22%, the same couldn’t be said for regional operations.
The regional portion of the company saw a 12% decrease of revenue in Q4 of 2023 when compared to Q4 of 2022. That was a decline from $991 million to $873 million.
A big chunk of that was attributed to two aspects, one of which was the casino workers’ strike in Detroit. The other was loss of high-end retail customers at National Harbor Casino in Maryland.
“It’s important to note that approximately $60 million of the decrease year-over-year came from Detroit and National Harbor, where those properties were impacted by disruptions related to a strike and some high-end play not returning, respectively,” Jonathan Halkyard, Chief Financial Officer for MGM Resorts International said during Tuesday’s call.
MGM Grand Detroit lost over $30 million from strike
The Detroit casino workers’ strike impacted all three casinos in Detroit. However, the MGM Grand Detroit had the strike linger longer than its two peers.
Union workers at MotorCity Casino and Hollywood Casino at Greektown ended their strike on Nov. 19 after 34 days. The MGM Grand Detroit went on for another 13 days while ironing out further details, concluding on Dec. 2.
The extended strike caused greater financial losses for MGM Grand Detroit compared to the other two casinos as well.
Prior to the strike, the MGM Grand Detroit was averaging $49.5 million in monthly revenue from slots and table games in 2023.
In October, the casino made just $37.3 million in gambling revenue. That was followed by just $30.6 million in November. Altogether, the loss from the 47 days totaled about $31.1 million below average.
Due to that financial hit, the MGM Grand Detroit finished 2023 with $564 million in revenue from slots and table games. That was down 6% from 2022’s total of just under $600 million.
MGM Grand Detroit starts 2024 on bad note
When returning to full work capacity in December, MGM Grand Detroit returned to form based on 2023’s monthly averages.
The casino brought in $50.6 million in slot and table game revenue.
However, that momentum didn’t carry into 2024.
January’s numbers were released on Tuesday and MGM Grand Detroit amassed just $44.6 million in revenue from slots and table games.
Excluding the two strike months, that was the lowest monthly total for MGM Grand Detroit since April of 2021. That month was impacted by capacity limitations due to the COVID-19 pandemic.
If removing months impacted by the pandemic, it was MGM Grand Detroit’s lowest monthly revenue since August of 2015.
Cyber attack also impacted MGM Grand Detroit
Prior to the workers’ strike, MGM Grand Detroit also was part of the cyber attack experienced by multiple MGM properties in September.
Two separate cyber groups, Scattered Spider and ALPHV, took credit for the attack. They gained access to ATMs, point-of-sale systems, credit and debit card terminals and more.
The attack impacted computer systems at the MGM Grand Detroit, forcing a shut down of some of its amenities and features that required internet connectivity.
The impact of the cyber attack was felt at multiple MGM Resorts properties across the country. Those issues lingered on into October in some cases.
“There was also some lingering cyber incident challenges that specifically impacted the regional portfolio given the promotional offers were not available to our customers for the first half of October,” Halkyard noted in the Q4 call. “Beyond these specific property circumstances in the fourth quarter, the regional property trends remained stable.
MGM Resorts opted not to pay the ransom requested by the attackers. Caesars also experienced a similar attack, but opted to pay the ransom to regain access to their system.
The MGM Resorts decision caused a longer delay in getting their systems back in their control.
