Editorials

Editorial

Problems with Wynn casino go deeper than the man

FILE- This March 15, 2016, file photo shows casino mogul Steve Wynn during a news conference in Medford, Mass. Facing investigations by gambling regulators and allegations of sexual misconduct, Wynn has stepped down as chairman and CEO of the resorts bearing his names. The Las Vegas-based Wynn Resorts in a statement said Wynn's resignation Tuesday, Feb. 6, 2018, was effective immediately. Wynn has vehemently denied the report's allegations. (AP Photo/Charles Krupa, File)
Charles Krupa/Associated Press/File
Casino mogul Steve Wynn is shown during a March 2016 news conference in Medford.

Steve Wynn is out as chief executive of Wynn Resorts Ltd. But that doesn’t end the questions for Massachusetts about what other Wynn executives or board members knew about a rash of sexual misconduct allegations against the casino mogul, including a $7.5 million settlement paid to a manicurist who said Wynn pressured her into having sex with him.

Follow-up reporting by The Wall Street Journal, which first broke the news of Wynn’s misconduct, suggests that the board’s suitability needs serious scrutiny from gambling regulators charged with enforcing ethical standards in the state’s gambling industry. As the Journal reports, “The Wynn Resorts board has consistently received low marks for poor corporate governance issues and ‘excessive’ executive compensation policies. Half of the independent directors have had seats for more than 10 years.”

In a lawsuit filed in Nevada, Massachusetts’ Norfolk County Retirement System pension fund accused the company’s board of directors of breaching its fiduciary duties by “turning a blind eye and disregarding a sustained pattern of sexual harassment and egregious misconduct by Mr. Wynn.”

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The Journal is also focusing on the possible complicity of Wynn executives when it comes to covering up for Wynn. As the Journal points out, Matt Maddox — the Wynn Resorts president who replaced Wynn as CEO — and Kim Sinatra, the company’s general counsel, were both at Wynn Resorts “when it applied for its Massachusetts gaming license and failed to disclose the $7.5 million settlement.” Both Maddox and Sinatra were investigated as “individual qualifiers” by the Massachusetts Gaming Commission. That means their individual suitability is part of the overall suitability designation Wynn Resorts needed in order to get the license to build a casino in Everett.

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What Maddox and Sinatra might know but failed to disclose is as important as what Wynn knew but failed to disclose. In fact, according to the Journal, “filings in a court battle between Wynn and Elaine Wynn, his ex-wife and a cofounder of the company, show that Sinatra knew about the allegations since at least 2009.”

At its last meeting, the gaming commission promised to continue an aggressive review of the allegations against Wynn and what others in the company knew about them. In the commission’s 2013 suitability report, investigators described Maddox as “very intelligent, with an even keeled personality, unquestionable integrity and honesty.” Sinatra was described as “an incredibly smart and loyal person . . . a great friend who is generous, thoughtful and kind.” A second, tougher look at both is definitely in order.

Ditching Wynn was obviously necessary. Renaming the company is another needed move, so that his disgraced name never rises over the Boston skyline. But those are first steps, not final ones. So what if the $2.4 billion Wynn Boston Harbor casino is half built? Wynn Resorts’ suitability to operate remains an open question.