It’s ridiculous to think Wynn Resorts could escape paying a multi-million-dollar fine stemming from a 10-count complaint filed by Nevada gaming regulators that read like excerpts from a Law and Order: SVU script.
But the company is nonetheless hopeful of that outcome when it faces the Nevada Gaming Commission.
Steve Wynn was shown the door a year ago, as were seven company executives who turned a blind eye during the last decade when they learned of their boss’s alleged sexual assaults and the nonconsensual sexual relationships he forced upon some of the casino company’s employees. The company’s board of directors has since been remade, new executives have been hired, and new corporate harassment policies are in place.
Wynn Resorts, once viewed as the pinnacle of the gaming industry, was publicly humiliated.
Current Wynn Resorts leadership told the Gaming Control Board in a stipulated settlement that the company “fell short” of its “culture and commitment” to its 25,000 employees.
In a public statement, Wynn Resorts said, “We have undergone an extensive self-examination over the last 12 months, intended to reinvigorate and implement meaningful changes across all levels of the organization, cultivate a safe, healthy and supportive workplace culture, and build on our core values of respecting our employees, corporate responsibility and citizenship, and service to the community.”
Is all this enough to avoid a fine higher than the record $5.5 million penalty the Nevada Gaming Commission laid on Cantor Gaming (now CG Technology) in 2014 after a top executive allowed $34 million in illegal sports wagers? Cantor’s CEO also lost his job following the scandal.
Some would argue yes.
“We do not expect the fine to be overly burdensome for the company,” Deutsche Bank gaming analyst Carlo Santarelli told investors. Shares of Wynn Resorts have been hammered in the last 12 months, a combination of concern over the company’s future and its issues in Macau. “We believe the conclusion of the investigation relieves a slight overhang for shares, despite not viewing a punitive outcome as being a base case for investors.”
Nevada gaming regulations allow the commissioners latitude in determining how much a fine – if any – it can assess Wynn Resorts. The panel can consider all the changes the company has undertaken in making its decision, and Wynn Resorts will have a chance to make its own case, even though the company waived its right to a public hearing. The control board, in the settlement, said it wouldn’t stand silent in “advocating… an appropriate discipline.”
The control board took the unusual step of not negotiating a fine, a decision that might have stemmed from last year’s matter with CG Technology, when the gaming commission rejected a $250,000 negotiated penalty and the sportsbook operator paid a $2 million settlement.
Also, the control board will soon look much different than the three-person panel that signed the complaint last Friday. Board member Terry Johnson is still on the board, but Chairwoman Becky Harris and board member Shawn Reid were on their last day on the job.
Harris is being replaced by former gaming commission member Sandra Morgan, and Reid’s replacement still hasn’t been named by the governor, who also must fill Morgan’s seat on the commission.
Gaming Commission Chairman Tony Alamo Jr. said Monday he plans to hold the Wynn hearing around the time of the panel’s scheduled Feb. 28 meeting in Las Vegas, even if there are still just four members.
Wynn Resorts’ statement laid out more than a dozen bullet points illustrating how the company has responded – and the significant changes it made – after the #MeToo movement landed squarely in its executive offices. The same bullet points wound up in the control board’s stipulated settlement.
“I have never seen a company take action that was as swift and comprehensive as the executive team at Wynn Resorts,” new company chairman Phil Satre said in a statement.
But are the actions enough to make gaming commissioners forget that Steve Wynn paid $7.5 million to a Wynn Las Vegas salon manicurist he allegedly raped and impregnated, or that he paid $975,000 to a Wynn Las Vegas cocktail server he reportedly forced into a sexual relationship, or the efforts of “Employee 8,” who allegedly facilitated sexual relationships for Wynn and his guests with Wynn Las Vegas cocktail servers?
Steve Wynn paid the “confidential settlements” out of his own pocket. Whatever Nevada’s gaming commissioners decide to fine Wynn Resorts, the money will come from the company’s bank account (i.e., shareholders will be footing the bill).
Let’s also remember that Massachusetts’ gaming regulators are watching.
The company is still facing an investigation there over its gaming license for the $2.6 billion Encore Boston Harbor, which is expected to open this summer. Steve Wynn filed a lawsuit in Nevada to keep the contents of the Massachusetts investigation private.
A Nevada judge is expected to rule on the matter in March.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
