Wynn Resorts’ casino license may hinge on Wynn’s departure, analysts say
The sexual misconduct scandal engulfing casino mogul Steve Wynn is looking less survivable by the day, industry analysts say, as pressure mounts for the brash chief executive to resign or be removed from the public company he founded.
One week after allegations were detailed in a Wall Street Journal article, Wynn, the chief executive of Wynn Resorts, is facing investigations from regulatory bodies in Nevada, Massachusetts, and Macau, as well as an internal probe by the Wynn Resorts board. On Thursday, his alma mater stripped him of an honorary degree.
The Massachusetts Gaming Commission is reviewing whether the company is suitable to retain its license to build a $2.4 billion hotel casino on the banks of the Mystic River in Everett — what the company has called the largest single-phased private development in state history.
The commission signaled to the board of directors of Wynn Resorts, during a public meeting on Wednesday, that the board’s handling of the allegations will go a long way toward shaping Massachusetts’ response.
“My perception of the meeting is that it was heading in the direction that Steve Wynn is not suitable,” said Clyde W. Barrow, a University of Texas professor who studies the New England casino market.
Massachusetts law requires casino license holders to conduct themselves ethically and gives the Gaming Commission broad authority to determine which companies — and which company executives — are suitable to hold a casino license.
Massachusetts casino regulators “have been sticklers on ethical issues,” said Frank Fantini, a casino specialist and publisher of Fantini’s Gaming Report. “And they will be under a national microscope in the Wynn case.”
Presuming that Massachusetts takes a hard line on the allegations, Nevada regulators would be under pressure to do the same, he said.
As CEO, Wynn is closely identified with Wynn Resorts. But the firm is a global, publicly traded corporation, and experts expect the Everett project to move ahead no matter who is running the company.
The casino, named Wynn Boston Harbor, is well into construction, with hundreds of millions of dollars already invested. Wynn Resorts officials anticipate the hotel tower will top off around the end of February. The resort is scheduled to open in June 2019.
More than 1,000 people are working at the Wynn site; that number is expected to climb to about 1,500 in the spring.
Stephen Crosby, chairman of the state Gaming Commission, said Wednesday that “for the time being, everybody who has jobs in Everett [at the Wynn site] should go about their business and feel fine.”
The Wall Street Journal reported Jan. 26 that dozens of people interviewed “told of behavior that cumulatively would amount to a decades-long pattern of sexual misconduct by Mr. Wynn,” including acts of exposing himself and pressuring employees for sex. The story said that in 2005, Wynn forced a manicurist at his Las Vegas casino property into sex, and later paid her a $7.5 million settlement.
Karen Wells, director of the Massachusetts Gaming Commission’s enforcement arm, said Wynn Resorts confirmed to her “there was in fact a settlement,” and that the existence of the private agreement was not disclosed to Massachusetts investigators who conducted a background check on Wynn Resorts and its key officers in 2013.
Wells has not commented on the nature of the settlement, saying the circumstances around the agreement, and the decision not to disclose it, are elements of her team’s investigation into the allegations against Wynn.
Wynn, 76, has become radioactive since the Journal story. He stepped down as finance chairman of the Republican National Committee. Governor Charlie Baker has asked the Republican Governors Association to return funds it received in the last three years from Wynn and Wynn Resorts.
On Thursday, officials at Wynn’s alma mater, the University of Pennsylvania, announced in an e-mail to the Penn community that the school would remove the mogul’s name from an outdoor plaza named for him, and from a scholarship fund Wynn endowed. The school will also revoke an honorary degree awarded to Wynn. Wynn attended Penn from 1959-63, earning a bachelor’s degree in English literature.
The note from the Penn officials also reports that the school is revoking the honorary degree awarded to Bill Cosby, putting Wynn, at least rhetorically, in the company of the disgraced comic.
The University of Iowa on Wednesday said it planned to remove Wynn’s name from the school’s vision research institute. Wynn had donated $25 million to the school for blindness research, according to news reports.
Wynn has been diagnosed with a congenital eye disease, retinitis pigmentosa, which has significantly impaired his vision.
Wynn has sharply denied the allegations in the Journal story.
“The idea that I ever assaulted any woman is preposterous,” he said last week in a statement. “We find ourselves in a world where people can make allegations, regardless of the truth, and a person is left with the choice of weathering insulting publicity or engaging in multi-year lawsuits. ”
Wynn Resorts declined to comment further Thursday.
The casino developer has not been charged with any crime. But suitability to hold a casino license is not like the jury standard of “beyond a reasonable doubt.” It is up to the license applicant or license holder to clearly demonstrate they are suitable, and it looms large that Wynn did not disclose the $7.5 million settlement to Massachusetts investigators.
The state Gaming Commission has a precedent for strictly enforcing ethics requirements, regardless of who it affects or what may be the consequences.
Ask Caesars Entertainment.
Early on in the state licensing process, Caesars and its local partner, Suffolk Downs, were widely considered locks to win the Boston-area casino resort license. But Massachusetts investigators raised red flags in the company’s background check, citing, among other things, a Las Vegas licensing agreement with a boutique hotel company that had a principal reputedly tied to Russian mobsters. With the writing on the wall that Caesars — one of the biggest and best-known casino companies in the world — might fail its background check, Suffolk Downs pushed Caesars out of the deal, in October 2013. Weeks later, the project still swirling with uncertainty, East Boston voted it down in a stunning referendum.
It is hard to imagine Wynn Resorts without Steve Wynn, who presented himself to Massachusetts as the embodiment of the company’s spare-no-expense-for-excellence philosophy. The cost for the company’s Everett project was once estimated at $1.2 billion. Then Wynn won the Boston-area resort casino license in 2014, and got serious about designing the place. Now the cost is pegged at $2.4 billion.
Wynn is credited with inventing the modern Las Vegas resort, beginning with The Mirage, which set new standards for luxury and design when it opened in 1989 on the Las Vegas strip. Hotel casinos he has built include the Bellagio — its dancing water display is an immensely popular free attraction in Vegas — Treasure Island, and the Wynn and Encore complex, where the company is tearing up a golf course and replacing it with an artificial lagoon. Wynn Resorts also runs casinos in Macau.
“You could argue that Steve Wynn is the most important figure in the history of gaming,” said New Jersey casino consultant Cory Morowitz.
What is Wynn Resorts without Steve Wynn?
“Wynn is a very good company in every way, with many capable, excellent people at all levels who execute the vision of Steve Wynn every day,” said Fantini, the casino industry publisher. “But if that vision isn’t there, I think over time, it may lose that special quality.” Like Apple in the 1980s, he said, after genius founder Steve Jobs left, it seemed the company “was missing its special sauce.” Jobs later returned, he said, “and we got the iPhone.”
In the casino industry, “the Wynn name is huge,” said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. “When you’re talking a Wynn casino, that is considered the height of opulence.” However, “if he’s not with the company, it’s still a Wynn casino. . . . Eventually, it may lose a bit of its luster, but it is still a strong brand.”
As Morowitz put it, “Wynn Resorts’ DNA is not going to change.”
Steve Wynn’s vision for the Everett project is already baked in the design plans, which include a curved bronze glass hotel, a massive glass-walled lobby overlooking the river, event space and restaurants, an enormous gambling floor, and a Jeff Koons sculpture of Popeye, for which Wynn paid $28 million in 2014.