Wynn is unsuitable to keep its license
The Commonwealth’s Expanded Gaming Act of 2011 sought to ensure that the Massachusetts Gaming Commission would award valuable gaming licenses only to those who were “suitable” and who demonstrated the highest levels of integrity and sound business practices. The Legislature anticipated the possibility that a licensed operator could subsequently become “unsuitable,” either because of subsequent behavior or because of newly disclosed information, and detailed a process for the Gaming Commission to choose a new operator in the event this occurred.
The Gaming Commission has always stated that it takes this responsibility seriously. When the appalling sexual misconduct allegations about Steve Wynn, former chairman, CEO, and founder of Wynn Resorts, came to light, Gaming Commission chairman Stephen Crosby assured Massachusetts that “ensuring public confidence in the integrity of the gaming licensing process and in the strict oversight of gaming establishments through a rigorous regulatory scheme is the paramount objective of this
Under this standard, the Gaming Commission should find Wynn Resorts unsuitable to hold a gaming license and should begin the process to select a new and “suitable” operator. Wynn Resorts has disqualified itself under the state’s gaming legislation from continuing as a licensed gaming operator.
This is much more than just the name on a building in Everett. The Gaming Commission should revoke the company’s license so that an operator who has the faith and trust of the Commonwealth and meets the “paramount” standards required by the Expanded Gaming Act can continue the work of creating a first-class gaming resort.
Wynn has resigned, but the corporate enablers of his alleged conduct remain with the company. Reports suggest that Wynn Resorts’ general counsel was made aware of a $7.5 million settlement Wynn reached with one of his many accusers.
However, the failure of the Wynn Resorts board, even absent any previous knowledge about Wynn’s alleged actions, to have adequate controls in place for workplace sexual harassment should be disqualifying. It has been alleged that the employees reported their complaints to management-level staff. The failure of the board, which includes only one woman, to have adequate controls in place to learn of and stop this conduct is a significant failure of corporate governance. Not surprisingly, Wynn Resorts ranks last in corporate governance among 108 companies in the gambling and casino business, according to Sustainalytics, an adviser to companies on corporate governance.
Most telling was the board’s praise of Wynn upon his resignation. While saying nothing about Wynn’s apparent victims, the board chose to say publicly “it is with a collective heavy heart” that it “reluctantly” accepted Wynn’s resignation. Should the Commonwealth continue to do business with an organization whose board fails to appropriately recognize the gravity of Wynn’s alleged actions?
The Gaming Commission has appropriately disqualified an entire entity before. The Commission acted decisively when it concluded that the former owners of Plainridge Raceway — Ourway Realty — were unsuitable because they failed to control the company’s chief executive. This case is no different.
Ironically, the very reason given by the Gaming Commission in awarding the license to Wynn — that they were impressed with the vision and creativity of Wynn and the global draw of his eponymous brand — not only no longer exists, we now understand this “vision and creativity” to be fatally flawed.
The marketplace can and will help solve the problem. Gaming industry operators will almost certainly be willing — even eager — to meet suitability standards for Massachusetts, and rescue the project.
The situation is not curable for Wynn Resorts in Massachusetts. Nevertheless, it is curable for the Commonwealth, for the thousands of workers in Everett who are building a $2 billion project, and for our gaming industry. The Gaming Commission made an unwitting error, but they now have the information and tools they need to avoid a second.
Martha Coakley is a partner at Foley Hoag LLP, which represents Mohegan Sun in litigation against the Massachusetts Gaming Commission. Mohegan Sun lost to Wynn in the competition for the Greater Boston casino license. Coakley is a former Massachusetts attorney general and Middlesex district attorney.