Wynn Awaits Hearing by Massachusetts Gaming Commission
Recently the Nevada Gaming Commission voted 4-0 to order Wynn Resorts Ltd. to pay a record $20 million fine because some top officials were aware of sexual harassment accusations against founder and now former CEO Steve Wynn.
Now the company is waiting for the other shoe (or more likely a boot) to fall on the company from the Massachusetts Gaming Commission.
The Las Vegas Review Journal noted last week that the fine, while the largest ever recorded by the commission, is a “slap on the wrist” since it is a tiny share of the company’s annual net income.
Moreover, some would regard it as unfair for the company, whose leadership is almost 100 percent new, should pay for the sins of those who used to run it, especially since the executives, employees and investors had no part in the Wynn allegations.
Fair or not, the company next must run the gantlet of the Massachusetts Gaming Commission, which, if anything, is likely to be even less tolerant of past sins than the Nevada board. While the Nevada board never considered pulling Wynn’s license, that is a possibility in the Bay State, where Wynn is building the $2.6 billion Encore Boston Harbor in Everett overlooking the Mystic River, and which is scheduled to open in June. If that opening is to happen on time, the company will need to start hiring the 5,000 employees needed to staff it by the end of this month.
Finally, after months of delay caused by a lawsuit from ex-CEO Wynn over documents obtained by the commission that he claimed were protected by attorney-client privilege, the commission’s investigative arm is poised to issue its investigative report conducted over most of last year.
Wynn, the company and the commission in principle settled that lawsuit two weeks ago, which opens the way for the MGC to conclude its investigation and hold public hearings to decide what action should take regarding the Everett casino’s license, and whether the company is still “suitable” to hold it.
According to newly seated MGC Chairman Cathy Judd-Stein said the settlement would allow the commission to see “all material and substantive information required to make a fully informed decision.” This implies that not all but enough of the documents Wynn objected to were made available to the commission.
Wynn himself faces nothing from the commission, because it has already ruled that he is no longer a “qualifier” to hold a license in the state.
Former Boston police commissioner Ed Davis, who now owns a security firm, has been tapped to serve on a three-person committee that will ensure that the company is responding to complaint in the future at all of its properties worldwide. Those include, but are not confined to sexual harassment complaints. He has been on the committee for four months. The committee’s creation is part of the overhaul of the company’s corporate culture since Wynn’s departure.
Steve Wynn’s sexual harassment accusations first came to light in January 2018 with a Wall Street Journal expose that reported, among other things, that the gaming mogul paid a $7.5 million settlement to a manicurist who alleged that he forced her to have sex with him in 2005 and that she became pregnant. Under pressure Wynn resigned as CEO and sold all his holdings in the company he founded. He continues to maintain his innocence of the accusations. His departure sparked the yearlong investigations in Massachusetts and Nevada. None of the four company executives who knew about the allegations against Wynn are still employed there.
The Nevada report also includes information on another settlement, this one in 2006, with a cocktail waitress who also accused Wynn of forcing her into sex. The settlement this time was for $975,000. It also discusses allegations made by a flight attendant and spa employees and accusations against other executives who allegedly slept with cocktail servers.
The report criticizes the company for not following its own procedures for following up on complaints or applying those procedures to its CEO.
Before the commission holds hearings its investigators will review background information on the new executives who head the Wynn firm. Their final action will be to issue a report on how the company handled allegations against Wynn. Everything in the report will be available to the public. That underscores why Steve Wynn sued to keep some material about himself out of it.
The document that commission will read is much longer and detailed than the 22 page report that was given to the Nevada board. It is expected to include details of the investigation and how investigators obtained their findings.
The public hearing will give the Wynn organization a chance to argue for its continued fitness. It must at this point present “clear and convincing evidence of suitability” according to the Massachusetts law that authorized casinos. It must show that its executives team behaves ethically.
Ethics is not something the MGC has taken lightly in the past. In 2013 it raised alarms about possible ethical problems with Caesars Entertainment, which was competing for the license that Wynn eventually won. Caesars eventually withdrew from the bidding process. Also that year, the commissioned deemed Ourway Realty, which originally proposed the slots parlor at the Plainridge Racecourse was found to be “unsuitable” because of its “deeply troubling” financial processes.
In the intervening year since Wynn departed, the company is expected to show that it is virtually a reborn a company, as is shown by the presence of the compliance committee that Ed Davis is a member of.
That begins at the top with Matt Maddox, who was raised to be CEO a year ago. There’s also a new chairman of the board, Philip Satre, formerly chief executive office of Harrah’s Entertainment.
Maddox is likely to point to a rehauling of the company’s corporate culture, including creation of senior vice president of human resources, and the hiring of a human resources manager from the Marriott hotel company.
Wynn added new policies that make it easier for employees to make complaints, and which requires such complaints to be reviewed by several officials, including attorneys and executives. Such complaints may also be referred to law enforcement.
Employees are now given mandatory sexual harassment training.
The MGM Springfield is stepping up efforts to prevent people under 21 from playing on the casino floor. The numbers of minors apprehended in the casino have increased and the company says stopping them is a top priority. To aid them officials are asking parents and guardians to watch their children.
They point out that the casino offers many family-friendly amenities such as ice skating, the cinema and that public pathways that avoid the gaming floor are clearly marked. The casino insists that parents must always accompany their children while on the property.
It is casino policy to check ID’s of anyone who appears under 35 to prevent underage persons from buying alcohol or entering the casino area.