Casino giant Wynn Resorts has had preliminary talks about selling its $2.5 billion Everett gambling resort to MGM Resorts International, a move that would remake the state’s casino industry before it is even on its feet, according to a person familiar with the talks.
News of the talks follows widespread speculation that Wynn Resorts is looking to leave Massachusetts, while state regulators are investigating sexual misconduct allegations against former company chairman Steve Wynn.
The disclosure of the private talks with MGM may well please Wynn Resorts executives, who have been looking to inject more urgency to conclude the commission’s investigation, according to people familiar with the strategic thinking at the company’s corporate headquarters in Las Vegas.
The investigation is not expected to be done before the summer.
“The company is looking for a signal that they’re not going to get their license yanked,” said Everett Mayor Carlo DeMaria, who negotiated the city’s deal to bring a five-star Wynn Resorts hotel and casino to the site of a former chemical plant on the Mystic River.
The Massachusetts Gaming Commission is also investigating how the company handled the complaints against Steve Wynn. Despite Steve Wynn’s departure and the likelihood that the casino will not bear his name, the commission could deem Wynn Resorts unsuitable to hold its lucrative state casino license.
State regulators have been tight-lipped about the investigation. But what little they have said has sounded ominous to officials at Wynn Resorts: Gaming commission chairman Stephen Crosby recently addressed the investigation with a statement that Wynn Resorts is proceeding with the project on an “at-risk basis.”
In a statement Thursday evening, Wynn Resorts CEO Matt Maddox seemed to refer to Crosby’s comment in explaining the company’s position.
“We remain very excited about the Boston market,” the Maddox statement said. “However, our obligation to shareholders is always to maximize the value of our assets and to mitigate risk. These obligations are particularly relevant in light of recent commentary that was made despite our rapid and decisive efforts to sever all ties with our former chairman, actively searching for new diverse board members, and fully cooperating with the regulators in Massachusetts and elsewhere.”
The talks between Wynn Resorts and MGM were first reported Thursday by The Wall Street Journal.
MGM is currently building a $960 million casino in Springfield, scheduled to open this fall, but would likely have to sell that property if it bought the Everett casino. State law forbids a casino company from holding two licenses in Massachusetts.
In a statement, Springfield Mayor Domenic Sarno said he has checked with the city’s lawyers and is confident in the “protections” its agreement with MGM afford the city.
“I don’t want to speculate on what MGM might or might not do,” he said.
The turmoil related to the Everett casino stems from January, when The Wall Street Journal reported allegations of a pattern of sexual misconduct by Steve Wynn, including accusations of exposing himself and pressuring employees into sex.
The allegations triggered investigations by the commission’s enforcement arm and Nevada regulators, and an internal review by the Wynn Resorts board.
Wynn Resorts — and Steve Wynn individually — passed background checks in Massachusetts before the company won the Boston area casino license in 2014, and the company was declared “suitable” to hold a license. Character and reputation are elements of “suitability,” and must be continually maintained. Investigators want to know what executives at Wynn Resorts knew about the allegations against Steve Wynn, and what, if anything, did they do about them.
Wynn Resorts is spending about $3 million a day in Everett, about half on payroll. About 1,500 people work at the site. The resort is around 60 percent complete and due to open in June 2019. Wynn Resorts has said the project is the largest single-phased private development in state history.
Since the allegations against him were reported in January, Steve Wynn has resigned from the company, sold his stock, and is moving from the villa where he lived at the company’s flagship property on the Las Vegas strip. He has denied ever assaulting any women.
Lawyers for Wynn Resorts and Steve Wynn have asked the gaming commission to remove Wynn as an “individual qualifier” from Wynn Resorts’ casino license. Qualifiers, which generally include top company officers and big shareholders, must pass a state background check to be found “suitable” to hold a casino license.
On Thursday, the commission deferred action on the request for about three weeks, until it can schedule a hearing to review the matter.
DeMaria urged the commission to “send a strong message” to the company by removing Steve Wynn from the license. The investigation can then concentrate on what company officials knew and did about Wynn’s alleged behavior, he said.
“Let’s get this done in a timely fashion,” DeMaria said.
An MGM spokesman said, “We do not comment on rumors or speculations around transactions. We remain fully committed to the opening and success of MGM Springfield.”Mark Arsenault can be reached at email@example.com. Follow him on Twitter @bostonglobemark.