Nobody could have predicted the long-lasting repercussions of last year’s reports that former Wynn Resorts owner and CEO Steve Wynn had sexually molested casino employees.
In early 2018 the Grande Vegas online casino and other Vegas casino industry insiders were stunned by the allegations and the fallout continues, hampering the company in many different ways. Over the last year, Wynn Resorts saw its CEO forced to resign, its board of directors revamped, the former wife of Steve Wynn stepping in to take a deciding role in the management of the company and its holdings and developments around the world put at risk.
Nevada Ruling
In February, the Nevada Gaming Commission issued its long-awaited ruling about punishment for Wynn Resorts – a record $20 million fine based on company decision-makers’ inability or unwillingness to take action. The fine should have brought some measure of closure but if anyone thinks that the company has seen the last of the consequences of Steve Wynn’s actions, they can think again. Wynn Resorts will be reeling from the aftermath of Wynn’s misconduct for years to come.
Massachusetts
Wynn Resorts has been building a new Integrated Resort in Massachusetts for several years. The resort, called “Encore Boston Harbor”, is presently in the final stages of construction and promises to bring hundreds of jobs to the Everett Massachusetts region.
The company obtained its license to develop a plot of land along the Mystic River as a casino resort in 2014. The project is scheduled to be ready to open this spring but, in the wake of reports about Steve Wynn’s sexual harassment of employees of his Vegas casino, the Massachusetts Gaming Commission announced that it would be investigating whether company executives or board members covered up for Wynn and, if so, whether their Massachusetts license was granted under false pretenses and should be revoked.
The Commission completed its investigation in December but the final report was delayed by Steve Wynn’s legal team which filed suit, saying that releasing information contained in the report would violate Steve Wynn’s rights because it contains unauthorized use of privileged attorney-client communications between Steve Wynn and his attorneys. Last week the Nevada Gaming Commission released its own findings, and with it a $20 million fine against the company. The Massachusetts Gaming Commission expects that Steve Wynn’s lawsuit will be dismissed that the way will be cleared for Massachusetts to hold its own suitability hearing to determine the company’s future in the state.
According to Massachusetts Commission Chairwoman Cathy Judd-Stein, the commission has directed Executive Director Edward Bedrosian to complete final settlement agreements to satisfy Steve Wynn’s claims and allow Clark County District Court Judge Elizabeth Gonzales to unblock release of the report that details Wynn Resorts’ response to allegations of sexual harassment. `
Judd-Stein said that the Commission can now move ahead with an adjudicatory hearing on the harassment allegations. The commission must determine whether Wynn Resorts is a suitable entity to operate a casino in Massachusetts, given questions about its executives’ responses, and possible cover-up activities in the wake of allegations against its former owner and CEO Steve Wynn.
The Commission will schedule a hearing, probably in March, where it will hear the investigative report that was prepared by Karen Wells. The report will be edited to meet the concerns of Steve Wynn as presented in his suit.
Following the hearing, the Commission members will deliberate and then vote on the suitability of Wynn Resorts to continue to hold a Massachusetts casino operating license. The commission might also consider the suitability of Wynn executives as part of that process.
Wynn Resorts has a lot riding on the Massachusetts hearing. If the commission expresses confidence in the company, it will have far-reaching implications on further expansion activities for Wynn Resorts, both within the United States and abroad.
What’s Next With Wynn?
Now that the Nevada Gaming Commission hearing is over, what’s can observers expect to see next in the Wynn Resorts saga?
For one thing, there’s a great deal of discussion about whether the punishment against the company fits the offense Some say that the $20 million fine, the largest that the commission has ever levied, is appropriate. The company, its employees, investors, and clients will suffer while the perpetrator of the crime, Steve Wynn, walks free.
Others point out that the amount, while unprecedented and massive, is basically a slap on the wrist that represents only about 3.4 percent of Wynn Resorts’ net income.
Now Massachusetts is center stage for the company where it stands to have the Gaming Commission strip it of its Massachusetts license if it comes to the conclusions that the company is not fit to operate a casino in the state.
Wynn Resort’s strategy is to present itself as an entirely new company. It is trying to make the case that it has “undergone a corporate transformation” over the past 12 months. The company is acknowledging that “certain former executives” did not take proper action when allegations against Steve Wynn were raised. “Consequently, we have made major changes at every level of key decision-making in the company.”
Some of the changes that the company is highlighting include:
- Separation from Steve Wynn, founder and former CEO of the company. Wynn, who developed famous Vegas landmarks such as Bellagio, the Wynn and Encore resorts and The Mirage, resigned in February 2018, moved off the company’s property and sold all of his Wynn Resorts stocks.
- The company has separated from executives and others in decision-making positions who failed to take action on allegations against Steve Wynn.
- Most of the old Wynn board has been replaced and three new executives, all women, have been added to the team.
- The company is restructuring so that the situation, in which a high degree of power is invested in one person, doesn’t reoccur. Steve Wynn was the founder, chairman of the board and chief executive. The company now employs Matt Maddox, former company president, as chief and Philip Satre is the new chairman.
- Wynn Resorts created a position of senior vice president of human resources for North America.
- The company instituted new policies so that employees could make complaints more easily and have them taken care of more efficiently. All complaints are referred to a cross-section of high-ranking people within the company and attorneys. These individuals are tasked with ensuring that the complaint is registered and investigated promptly. When a complaint is deemed to cross legal boundaries it will be referred to law enforcement.
- The name “Wynn” has been dropped from the Massachusetts casino project
- All employees of Wynn Resorts in Las Vegas and in Massachusetts will be required to undergo mandatory sexual harassment training
The next step is up to the Massachusetts Gaming Commission which has a reputation as being tough on company ethics. Observers say that the decision will come down to whether Wynn Resorts has proved a commitment to ensure the dramatic operational and cultural changes.
