Executives at casino operator Wynn Resorts helped cover up sexual misconduct allegations against their former boss Steve Wynn, according to a report by Massachusetts gaming regulators.
Tuesday saw the long-awaited release of the Massachusetts Gaming Commission (MGC) report into the suitability of Wynn Resorts to operate gaming in the state. Wynn hopes to open its $2.6b Encore Boston Harbor casino this June, but first the MGC has to rule on whether the company’s efforts to keep Steve’s shenanigans a secret make the company an unwelcome addition to the state’s gaming family.
The 199-page report (read it here) involved MGC investigators traveling to six different states to interview over 100 witnesses, including many former Wynn staffers who claimed knowledge of Steve’s alleged escapades (which the former exec continues to vehemently deny).
The report determined that some senior Wynn execs chose to either look the other way when confronted with evidence of Steve’s activities or actively chose to cover his tracks, such as the case in which the company cut a $7.5m check to a former Wynn manicurist who alleged that Steve was the father of her child.
The report slams certain Wynn execs as being part of “affirmative efforts to conceal allegations against Mr. Wynn,” and that these “efforts at secrecy made it exceedingly difficult, if not impossible, for gaming regulators to detect potentially derogatory information though typical regulatory means.”
The report also notes that no Wynn exec revealed the existence of the allegations against Steve during the company’s 2013 suitability investigation by the MGC. The report goes on to say that there was a “culture” at Wynn that led lower level staff to either fear repercussions from reporting allegations against Steve or to believe that reporting allegations to management “would be futile.”
The report concedes that Wynn has made significant changes since the allegations against Steve were made public in January 2018 via the Wall Street Journal. These include a lot of senior management turnover, a more female-friendly board of directors and enhanced internal controls regarding certain standards and practices.
Wynn issued a statement saying it “does not contest the facts” in the report while maintaining that “any employee who was aware of allegations of sexual assault against the Company’s founder and did not investigate or report is no longer with the Company.”
The report was released on the first day of a planned three-day hearing into Wynn’s suitability. Wynn reps are scheduled to make their presentation to the MGC on Wednesday.
MGC investigator Karen Wells told the five commissioners tasked with deciding Wynn’s fate that the company’s “remedial measures” to improve its workplace culture “do not erase the past.” Wells said Wynn’s story represented “a very serious issue of corporate governance which requires careful consideration.”
Tuesday’s hearing also heard from a local resident who was reportedly on the receiving end of unwanted advances from an unnamed Encore Boston Harbor exec. Following the individual’s second complaint, Encore officials turfed the exec. The MGC report noted the disparity in Wynn’s handling of the allegations against the Encore exec compared to the hands-off approach involving Steve.
In January, Wynn Resorts reached a settlement with Nevada gaming regulators that preserved the company’s state gaming license. The company was hit with a $20m fine, a new record penalty for a gaming operator in the state but a relatively paltry sum for a company of Wynn’s size.
The question for the MGC is whether to impose a similar eight-figure penalty on Wynn or to take the high road and require the company to divest itself of its Boston resort. The latter course would likely spark years of expensive legal battles, which the state might well end up losing.
And even if it won, the property would be sitting vacant the whole while, and for a while afterward as Wynn negotiated a transfer of ownership with rival operators, during which the state would be earning exactly zero dollars in tax revenue. Cynical or not, figure out for yourself what the most likely result will be and how much of the next few days’ hearings will be pure theater.
