The high-stakes poker game that Wynn Resorts and MGM just lost
Imagine a high-stakes poker game involving Wynn Resorts CEO Matt Maddox, MGM Resorts CEO Jim Murren, gaming commission chair Cathy Judd-Stein, Everett Mayor Carlo DeMaria, and Springfield Mayor Domenic Sarno. They’re playing with millions of tax dollars, thousands of jobs, and the future of the Massachusetts casino industry on the line.
Wait, we don’t need to imagine it. Some version of this actually happened. Our very own real-time, reality TV show with the fate of the state’s two resort casinos up in the air and no shortage of behind-the-scenes drama and backstabbing accusations.
Then just like that, the game was over. Maddox and Murren folded their cards Tuesday and broke off talks to sell Wynn Resorts’s $2.6 billion Everett casino to MGM, which already operates a casino in Springfield.
Why? Because it became ever clearer that the gaming commission and the two mayors had the winning hand. The gaming statute and host agreement give the commission and local communities unusual power over the industry.
Nothing happens — no sales, no trades — without them.
And it certainly didn’t help that Governor Charlie Baker and House Speaker Bob DeLeo seemed peeved about the attempt to play musical chairs with coveted gaming licenses. The commission would need to bless both the sale of MGM’s operation in Springfield and Wynn’s sale of Encore Boston Harbor in Everett.
That’s what Vegas titans Maddox and Murren forgot. What happens in Vegas doesn’t happen in Massachusetts. They may not like it, but hey, they were the ones who chose to do business here.
Some advice to the big shots: Play by our rules; don’t try to blow them up. Maddox, we expected this from you; Murren, you know better. Judging by MGM’s statement about the abandoned sale talks, the company now recognizes its hubris.
“We have noted the anxiety raised by various stakeholders regarding a transaction and this troubles us at MGM,” the company said. “We only wish to have a positive impact on communities in which we operate.”
What Maddox and Murren were betting on was a gaming commission fed up with Wynn Resorts, after its cofounder Steve Wynn resigned and sold his stake in the company following allegations by female employees of sexual misconduct. Steve Wynn has denied any wrongdoing.
Last month, after a long investigation, the commission decided that Wynn Resorts could keep a gaming license here if it complied with additional conditions. Among them: $35.5 million in fines, leadership training for Maddox, and the hiring of an independent monitor to review company policies and organizational changes. Wynn Resorts has until May 31 to pay the fines or launch a legal appeal.
For now, the company is sticking to a June 23 opening date for the Encore Boston Harbor casino on the Mystic River.
At a regularly scheduled gaming commission hearing Wednesday, Judd-Stein, the chair, acknowledged the sale talks but noted that the parties had not come to the commission to formally propose a transaction. She also tried to say something nice about Wynn Resorts and the Encore casino.
“Despite the many challenges to bring this massive and complex project to fruition,” Judd-Stein said, “the fact remains that Massachusetts and the City of Everett is home to a nearly complete, world-class $2.6 billion development that has dramatically transformed the waterfront; a land that was previously dormant, desolate and contaminated, which upon issuance of a certificate of operation, will soon be a place of employment for more than 5,000 people.”
She went on to say that the Massachusetts Gaming Commission “is fully committed to dedicating all the resources and attention necessary to ensure that the property can open in a timely and orderly fashion and in accordance with what is required by law, just as the MGC has successfully done twice previously.”
OK, that’s what counts as effusive praise from a trained lawyer like Judd-Stein.
Here’s what she really meant to say: “We get it. Massachusetts needs Wynn Resorts more than Wynn Resorts needs Massachusetts. The Everett casino is but a small part of Wynn’s global multibillion-dollar empire.”
“You’re here, and we want you to mint money because that’s more tax dollars for the Commonwealth. Selling the marquee Boston-area license to MGM? That would have been like letting the Westin take over the Four Seasons. No way. The success of the Massachusetts casino market depends on having a best-in-class operator like Wynn Resorts in Boston’s backyard.”
Now, was that so hard?
“Mad Matt,” as Globe columnist Joan Vennochi has dubbed him, needs to take a chill pill, but the gaming commission could do better at making Wynn Resorts feel welcome, warts and all.