IGT Discloses Cybersecurity Incident, Financial Impact Not Clear

Posted on: November 20, 2024, 05:30h. 

Last updated on: November 21, 2024, 10:13h.

Todd Shriber Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of International Game Technology (NYSE: IGT) traded lower on Wednesday after the lottery giant announced late Tuesday that it was the victim of a cybersecurity incident.

MGM hack
International Game Technology revealed in a regulatory filing that it was the victim of a cybersecurity incident. (Image: Shutterstock.com)

In a Form 6-K filing with the Securities and Exchange Commission (SEC), IGT said that on November 17, it became aware “that an unauthorized third party gained access to certain of its systems” and that some disruptions resulted from the technological intrusion.

Promptly after detecting the issue, the company activated its cybersecurity incident response plan and launched an investigation with the support of its external advisors to assess and remediate the unauthorized activity. The company has also proactively taken certain systems offline to help protect them. The company’s ongoing investigation and response include efforts to bring its systems back online,” said IGT in the filing.

IGT is one of the largest providers of lottery services, including state games and scratchers, in the US and around the world.

Financial Impact Could Be Immaterial

There are multiple examples of gaming industry cybersecurity incidents proving costly for the targeted companies, but at this point, IGT said the financial effects of the recent attack, if any, aren’t known.

In a note to clients on Wednesday, Stifel analyst Jeffrey Stantial said the financial impact of the cyberbreach is likely to be “immaterial” if IGT swiftly remedies it, and that appears to be what the company is attempting to do.

“Pre-established business continuity plans are underway, and we believe IGT can mostly maintain ‘business as usual’ while the breach is isolated and remedied — though prolonged internal systems shutdown could result in slight delays in product/software deliveries,” wrote Stantial.

Stantial also pointed out that the breach appears confined to IGT’s internal systems and not the consumer-facing sides of the business, and that if the incident results in shipping delays, they would likely be measured in days or weeks, not months.

Curious Timing of IGT Cyberissues

The cybersecurity flap at IGT occurred just a few days after Everi Holdings (NYSE: EVRI) investors approved a transaction in which that company will combine with IGT’s global gaming and PlayDigital units and be acquired by an affiliate of private equity firm Apollo Global Management (NYSE: APO).

That $6.3 billion transaction was announced in July and will result in $4.05 billion in gross proceeds flowing to IGT, with the remainder going to Everi. That deal is expected to close in the third quarter of 2025.

At this time, there is no evidence that the hackers who targeted IGT did so due to the merger or to disrupt that process.