The Nevada court fight between Wynn Resorts and its former number one shareholder Kazuo Okada got thrown a wobbler on Tuesday with the news that the US Department of Justice has filed a motion to intervene in the case. Bloomberg’s Edvard Pettersson reported that the DoJ is seeking to halt further collection of evidence related to the civil suit because it doesn’t want the spat between Wynn and Okada to interfere with its criminal investigation of Okada’s activities in the Philippines. Okada is chairman of Universal Entertainment Corporation, the Japanese pachinko giant that is constructing a resort-casino project in the Philippines’ Entertainment City complex in Manila.
In January, it was revealed that the US Federal Bureau of Investigation was investigating allegations of bribery involving Okada and former executives at the Philippine Amusement and Gaming Corporation (PAGCOR). Okada has been accused of funneling millions of dollars through Universal subsidiaries to high-ranking PAGCOR execs in order to secure concessions on land use and foreign ownership restrictions on Philippines-based businesses. Because the payments involved Universal’s US-based subsidiary, the US is seeking to learn whether Okada’s activities constitute violations of the Foreign Corrupt Practices Act (FCPA).
If Okada was found to have violated the FCPA, it could threaten the gaming licenses held by Aruze Gaming America, which develops and supplies gaming devices to facilities in over a dozen US states. The DoJ has investigated numerous allegations of FCPA violations involving US companies with operations in Asia, and Las Vegas Sands admitted in March that it may have possibly violated the FCPA in past dealings with Chinese officials.
In March, Wynn had amended its complaint against Okada to eliminate certain allegations, after which Universal stock shot up 20%. Tuesday’s news has sent Universal shares down a nearly identical amount. Neither Universal nor Wynn has formally commented on the DoJ’s filing.
