It was one of the biggest deals in memory that didn’t happen: Wynn Resorts this month discussed selling the Encore Boston Harbor hotel and casino to MGM Resorts, though talks broke off without an agreement.
But MGM was not the only suitor for the $2.6 billion gambling resort on the Mystic River in Everett. Boston businessman John W. Henry, principal owner of the Boston Red Sox and the owner and publisher of The Boston Globe, backed by a group of potential investors, quietly investigated buying the Encore in 2018 and again just weeks ago, Henry confirmed in response to questions from a Globe reporter.
In the spring of 2018, the Encore development was in a haze of uncertainty. The company’s chief executive, Steve Wynn, had recently resigned due to the revelation of sexual misconduct allegations against him, his ownership stake had been sold, and regulators in Massachusetts and Nevada were investigating whether the company was still fit to hold a gambling license.
During this period, Henry reached out to Wynn Resorts’ new chief executive, Matt Maddox. “I told him that I had been approached and I was sure that we could put together a very strong group of local buyers who would want to become minority investors or even purchase the project outright,” Henry said in an e-mail exchange.
Henry declined to name other potential investors, but said the idea for an Encore bid was first raised to him a year ago by an acquaintance.
“I wouldn’t say that initially I wanted to buy it, but I began to study the situation,” Henry said. “As I did, it became clear that Wynn was investing an extraordinary sum to create a world-class resort — one that was going to provide considerable long-term benefits to the community. It was logical to assume that if, in fact, Wynn was going to sell, local ownership committed to the community would be a big, big plus. So the next step was to call Matt Maddox to inquire if they were contemplating options.”
Wynn Resorts has acknowledged it contemplated selling the nearly finished casino. Just last Friday, the Las Vegas gambling giant confirmed it was holding talks with MGM Resorts about a possible sale. Those talks ended this week without a deal, after elected officials throughout the state expressed concerns about a potential disruption to the state’s young casino industry.
A Wynn Resorts spokesman confirmed Thursday that Henry had reached out, adding that the overtures were unsolicited and that Henry had offered to come to Las Vegas to meet.
After seven years of licensing, environmental cleanup, and construction, Encore Boston Harbor is scheduled to open June 23. The resort will have 671 hotel rooms and suites, 15 bars and restaurants, some 50,000 square feet of meeting and event space, and a gambling hall with more than 3,000 slot machines, an array of table games, and a poker room. Wynn Resorts boasts that the project is the largest single-phased private development in Massachusetts history.
The company’s initial response last spring, Henry said, was that it was not inclined to sell.
“Mr. Maddox’s reaction was that he was determined to keep the project going as planned,” he said. “I give him a lot of credit for staying the course despite the uncertainty of Wynn’s issues at that time with the Mass. Gaming Commission.”
So the talks did not get far, he said. “Locally we understood that changing the course could have affected or at least worried thousands of those who are working and will work locally, so I respected [Maddox’s] determination to risk continuing to build. It was the right thing for the project, construction workers, the community and his shareholders.”
Fast-forward to April 2019. Massachusetts investigators delivered their hefty report to the state Gaming Commission, which concluded that some former Wynn Resorts executives had helped cover up sexual misconduct accusations against Steve Wynn. Wynn, 77, has denied assaulting any women.
After digging into the facts in a public hearing in early April, the five-member Gaming Commission huddled behind closed doors to consider whether Wynn Resorts should keep its casino license. The commission would take weeks to issue its decision, offering no hint in the meantime about how it might rule.
“With the prospect of a ruling from the Gaming Commission creating more uncertainty, I was again approached locally about getting involved – this time by someone else who was worried about the state’s long-term interests,” Henry said, without naming who approached him. “So I went back to the group, spoke with a couple of more people, and we decided to reach out again to see if there was an interest at this point.”
Again, Maddox decided not to deal — “a good decision for Wynn because the ruling was favorable,” Henry said.
The commission ruled April 30 that the company and all its key leaders were suitable to run a casino in Massachusetts; the commission did fine the company $35 million and attached some additional conditions to the license.
Asked whether he played a role in Globe editorial page policies on the Wynn licensing bid while trying to buy the casino, Henry said he did not, adding that Globe editorials on casino gambling often run counter to his own opinions anyway.
Henry said he was not involved in MGM’s recent discussions about buying the Encore.
With the MGM talks done, is there any chance his group would try again with Wynn Resorts?
“While we were serious, we had minimal conversations with Wynn,” he said. “It has to be in everyone’s interest to see Encore open just as it is scheduled to do, without any internal or external disruption, and see first-hand the value of this project to the region.”