Executives with Caesars Entertainment were tight-lipped about labor negotiations and a cybersecurity breach that occurred last month during its third-quarter earnings call with investors on Tuesday.
The company told the Securities and Exchange Commission in its 10-Q filing that 13 class-action lawsuits have been filed against the Reno-based company since Caesars said publicly on Sept. 14 that it had been the target of a data breach. Similarly, the company received an unspecified number of inquiries from state regulators about the breach.
Caesars was the target of a social engineering cyberattack, in which bad actors entered the system through a third-party IT vendor, in August. The company confirmed that hackers took personally identifiable information from the company’s loyalty database. It reportedly paid millions in ransom.
Costs associated with the data breach were not detailed on the call nor in the report. Caesars said it has cybersecurity insurance policies designed to cover expenses associated with a breach and its fallout.
“While we have submitted claims for insurance coverage relating to the costs incurred as a result of the Data Incident, we are not certain of the extent to which such coverage or third-party indemnification will cover such costs,” according to the 10-Q report.
Interestingly, the only mention of a cyberattack in the company’s Tuesday afternoon call with Wall Street was in reference to competitor MGM Resorts International, whose nine-day cyberattack is expected to cost the company about $100 million.
Asked by an analyst whether the company saw an “outsized benefit” during MGM’s cyberattack, CEO Tom Reeg said: “Nobody benefits from a cybersecurity incident.”
Labor negotiations continue
Caesars officials also made passing mentions of the ongoing labor negotiations with Culinary Local 226. Workers at the company have been working under an expired contract since mid-September and authorized a strike to be called at any time – a threat that increasingly grows against the backdrop of the Formula One Las Vegas Grand Prix to be held in just over two weeks.
“This is a five-year contract so it (may) seem like, ‘Gee, why don’t you just get it done next week?’” Reeg told investors. “These are complex contracts that cover a long period of time and we’re going to do the work with the union to make sure that we do it right for all parties. I can’t tell you if that means it’s going to happen next week, a couple weeks from now or a month from now, but we are in dialogue constantly with the union.”
Culinary Secretary-Treasurer Ted Pappageorge said Monday that the companies “had made some progress, more than we have in a while” in their negotiations on wages and “economic issues” but “not enough.”
Other discussions on contract points – like daily room cleaning, on-the-job safety, and protections from technology replacing jobs – had not met the union’s demands, Pappageorge said.
“You should expect that when we reach agreement on a contract it’s going to be the largest increase that our employees have seen in the four decades since we started interacting with the culinary union,” Reeg said, echoing some of the union’s public language. “That’s well deserved.”