Full Speed Ahead, Says New Wynn CEO
Newly appointed Wynn Resorts CEO Matt Maddox is spending his first days on the job assuring the gaming giant’s employees that the company is moving confidently forward toward completion of the major resort projects launched by his disgraced predecessor.
In a series of town hall-style meetings with members of a corporate-wide workforce of 25,000 people, the 42-year-old executive also affirmed the company’s commitment to gender equality and a “zero-tolerance” policy toward sexual harassment.
Declining to specifically address issues related to Steve Wynn, who earlier this month resigned as chairman and CEO of the company he founded in the wake of a Wall Street Journal exposé detailing years of alleged sexual harassment and coercion on the part of the casino tycoon, Maddox said he is prepared to answer any questions put to him by investigators looking into the accusations.
Wynn has vehemently denied the claims of his accusers, although his lawyers have admitted that he privately paid a former Wynn Las Vegas manicurist a $7.5 million settlement
He has blamed the Journal story on a campaign instigated by his ex-wife Elaine Wynn, with whom he is embroiled in a three-way court battle along Wynn Resorts co-founder Kazuo Okada over control of a potentially decisive chunk of the company’s stock.
Okada, a billionaire from Japan who made his fortune in machine gaming, was ousted from the board of Wynn Resorts in 2012 and stripped of his sizable shareholding amidst reports of bribery in connection with a gaming development in the Philippines. He is suing the company to regain the shares.
Elaine Wynn was removed from the board in 2015 after she went to court to challenge the divorce settlement that granted Wynn control over her stock, a settlement reputedly obtained by Wynn to outmaneuver Okada’s influence in the company.
Subsequent to Wynn’s resignation the board of directors, which could face a barrage of shareholder lawsuits in connection with his alleged sexual misconduct, has created a committee to investigate the accusations and review the company’s internal policies and procedures to ensure a “safe and respectful workplace for all employees”.
The allegations also are under investigation by gaming regulators in Nevada and Macau, Wynn’s principal markets, and in Massachusetts, where the company is developing a $2.4 billion casino hotel slated to open next summer outside Boston.
Maddox, who does not sit on the board but has served in executive roles since the company’s founding in 2002, has denied any personal knowledge of misconduct by his former boss.
He said also that people should “hold off making any judgment until the investigations into the accusations are complete.”
In the meantime, he appears determined to lay to rest reports that the board is considering changing the company’s name.
“My thoughts are that our brand stands for excellence, high quality and service and all 25,000 of us are proud of that,” he said.
In meetings with employees he has steered a decided tack toward the future, announcing measures that include a corporate task force focused on gender equality, led by General Counsel Stacie Michaels and Chris Flatt, who heads hotel sales and marketing. A new policy is being rolled out providing employees with newborn children with six weeks of paid parental leave. The company also is establishing a merit-based scholarship fund.
“I’m going around in the town halls explaining not only is the company stable, it’s strong. So, all of you are safe,” he said. “We are going to keep executing what we do. And I’m pointing out at each town hall that this is a zero-tolerance company.”
As for the company’s multibillion-dollar project pipeline, Maddox vowed that it’s full-speed ahead with the heralded design team behind The Mirage, Treasure Island, Bellagio and Wynn Las Vegas intact, led by architects Roger Thomas and DuRuyter Butler, and bolstered by a new “innovation advisory team” he is assembling.
“The idea is that our future projects are going to continue to be leading in innovation and creativity,” Maddox told The Associated Press. “We are continuing to move forward as fast as we can.”
Speaking of Paradise Park, the massive hotel and entertainment enclave on the site of a former golf course the company owns just behind the Las Vegas Strip, he said construction has begun on a 400,000-square-foot convention facility adjacent to a planned lagoon, and the company has already begun booking conventions there for its scheduled completion in two years.
He said development of the so-called Wynn West hotel project on 38 acres across the Strip from the Wynn Las Vegas “is still in the top of the first inning” and is proceeding as planned.
In Massachusetts, however, there is a question than whether the company that bears his name will even be allowed by the Massachusetts Gaming Commission to finish the $2.4 billion mega-casino.
The commission is concerned not so much with his misconduct, as for the fact that the company actively kept his $7.5 million settlement with one of the women he allegedly harassed from the commission when Wynn was applying for the Boston Metro casino license.
The commission could revoke or suspend the license or levy a large fine.
Investigators gave commissioners an update on the month-long investigation last week. The commission has termed the investigation “a priority.”
Commission Chairman Stephen Crosby, asked by reporters if the panel would make a decision soon, replied, “This is one of these things where investigations are complicated, the stakes are big, and we need to do it carefully and right. And we’re giving the investigations and enforcement bureau the time and the space to pursue whatever they think is appropriate.”
At this point Wynn Boston Harbor, which is actually being built in the city of Everett, is still heading toward a June 2019 opening.
Crosby said, “I think what people should do, would be just to sit tight and see what happens,” adding “We’ve said that for the time being everybody at the Wynn facility should go about their business and feel fine about it. And we will eventually figure out what we need to figure out, as I’ve said before, what the hell happened here.”
He added, “A central question is, what did the board of directors and staff know and when did they know it, about the settlement and the associated allegations.”
The chairman said he was happy Wynn resigned his leadership, and if the board covered up the allegations or if the “entire company is tainted” it would be appropriate to yank the license.
The casino construction has made great strides in cleaning up what was once a toxic waste hazard contaminated by many decades of chemical plants operating along the river, returning it to close to its state of nature two centuries ago.
Meanwhile candidates for public office are weighing in on the issue, with the importance of saving local jobs rising to the top of their public concerns, by vying with a concern for victims.
Congressman Michael Capuano, who is running for reelection, and whose primary challenger is Boston City Councilmember Ayanna Pressley, made it clear during a talk with reporters that his priority is the 4,000 construction jobs and the equal number of permanent positions that will be created when the casino opens.
“Everything they do from this point forward has to have an eye towards those jobs as far as I’m concerned,” he said, “Simply closing it down is not an answer.”
Pressley has a slightly different emphasis. “From the beginning, I have never been a fan of gaming as an economic development strategy, however, there are many workers who did nothing wrong that stand to lose their livelihood without development on that site, not to mention the permanent jobs,” she said, but added, “Regardless of what happens with the site, whether it becomes a casino or larger mixed development, I will continue to advocate for the mitigation funds to create real, concrete job training pipelines for permanent jobs on site and within the district.”
Taking up some of the issues the commission is wrestling with, Capuano said, “If the entire board has been implicated in this wrongdoing, that is a real serious problem and I think that the state should take action,” but added that the commission couldn’t simply pull the license and leave an unfinished casino in limbo.
Both candidates agree that Wynn’s name is toxic, and that the casino should not bear that name.
Pressley declared, “If the Gaming Commission does decide to keep this casino, under no circumstances should the Wynn name be emblazoned on its facade,” Pressley said. “It sends the message to survivors that fame and power are more important than them and their healing.”
State Attorney General Maura Healey has also called for expunging Wynn’s name from the resort. On a radio show last week she echoed Crosby’s concerns. “We need to know from, not just Steve Wynn, but more importantly the entire Wynn enterprise, all Wynn companies—we need to know what they knew, when they knew it, what they chose to disclose, what they chose to withhold from the state of Massachusetts when applying for this license and going through the suitability review.” Healey opposed the 2011 law that authorized casinos in the state.
Pressley is worried that Wynn himself remains a factor in the company. “I think it was appropriate for Steve Wynn to step down – but I remain concerned that even with Wynn stepping down, he still wields influence over the Wynn company and their internal procedures,” her statement said.
The Boston Globe last week called for the memory wipe of the Wynn name, but didn’t stop there. “Renaming the company is another needed move, so that his disgraced name never rises over the Boston skyline. But those are first steps, not final ones. So what if the $2.4 billion Wynn Boston Harbor casino is half built? Wynn Resorts’ suitability to operate remains an open question.”
Wynn’s victory over Boston and its mayor, Marty Walsh, after a bitter battle, left a bad taste in the mouths of many Bostonians, so the paper’s attitude is not unexpected.
The people in Boston may not share those ill feelings. A poll by MassINC of the 7th Congressional District, which includes Boston, showed that 50 percent of all Democratic voters agree that the construction of the resort should continue now that Wynn is no longer connected with it. Twenty-three percent said the project should continue, but that another developer should complete it. Twenty percent called for killing the project, with 7 percent stating no opinion. A second question asked whether the casino should be renamed, with 64 percent saying yes and 21 percent saying the name should be retained.
As this discussion continues, Bay State officials have proposed a plan for building a 780-foot pedestrian bridge to cross the Mystic River and link Somerville and Everett, connecting the Assembly Square Orange Line stop and the casino. Wynn Resorts has agreed to pay for a $250,000 feasibility study and some of the $23 million cost of designing and building the bridge.
Will support for working with Wynn now evaporate?
The bridge would be the longest such structure in the Greater Boston area. It would make it possible to walk ten minutes to cross from Boston to the casino.
The agency responsible for building such a bridge, the Department of Conservation and Recreation, says it is searching for funding for it. It won’t be eligible for federal funding until there is a more concrete proposal, and some serious commitments by private and public entities.
Since no public agency is jumping up and down to volunteer funds, officials may be forced to ask for more money from Wynn at a moment when the urge is to shun it. But at the same time the company may be wanting to do everything it can to build up political points.
The bridge has been proposed for many years before the Wynn casino was ever thought of—as a logical feature to serve a fast-growing part of the city.
In Macau, the company owns two parcels totaling 11 acres near the Wynn Palace property that opened in 2016.
“We’re in full design mode there to present to the government a plan for additional hotel rooms, suites and some really exciting new entertainment, food and beverage concepts,” Maddox said.
A full-time design group has been dedicated to Macau, led by Chris Gordon, a 20-year lecturer from the Massachusetts Institute of Technology Center for Real Estate and one of the Boston Harbor design leaders.
Maddox also has traveled to Japan on and off for the past eight years, establishing contacts in the company’s bid to become one of the first holders of a gaming license there, a process expected to progress to the end of this year.
He knows the Far East markets well, having worked for Wynn Resorts in Macau before returning to Las Vegas in 2006 to take up the position of chief financial officer and later president.
He said the board of directors had been developing a succession plan for roughly four years and Wynn’s resignation merely accelerated its implementation.
“They, along with Steve, decided to make me the president of Wynn Resorts with the idea that eventually, assuming things continue to work well, I would become the CEO,” he said.