GGRAsia – Nevada fines Wynn group US$20mln in sex misconduct saga

Nevada fines Wynn group US$20mln in sex misconduct saga

Feb 27, 2019 Newsdesk Latest News, Macau, Top of the deck, World

The Nevada Gaming Commission has imposed a reportedly record US$20-million fine on casino operator Wynn Resorts Ltd, it was announced on Tuesday.

The fine is for 10 violations of the state’s Gaming Control Act and the commission’s rules, concerning failure to take appropriate action regarding allegations of sexual misconduct made against the firm’s founder Steve Wynn and at least one other unnamed executive. Mr Wynn resigned as group chairman and chief executive in February last year. He has denied wrongdoing.

It was announced in late January that Wynn Resorts and the Nevada Gaming Control Board had reached a settlement regarding the probe the regulator was conducting on alleged sexual misconduct by Mr Wynn. As part of the settlement, Wynn Resorts had agreed to pay a fine, but the amount was yet to be determined. That determination was announced on Tuesday.

Wynn Resorts – the owner of Macau casino operator Wynn Macau Ltd – said in a press release on Tuesday it was “pleased” that the commission had “recognised the company’s transformation and ‘refreshed culture’ over the course of the last 12 months and acknowledged the ‘paradigm shift’ that has occurred within the company”.

Wynn Resorts is still awaiting the outcome of an enquiry by the Massachusetts Gaming Commission regarding its suitability to hold a gaming licence for its nearly-completed Encore Boston Harbor resort. The enquiry was sparked by the allegations against Mr Wynn

Macau’s casino regulator, the Gaming Inspection and Coordination Bureau, had said in January last year – prior to the resignation of Mr Wynn – that it had met representatives from Wynn Macau following the allegations of sexual misconduct made in the United States against Mr Wynn, “better to understand the situation”.

Tuesday’s press statement by Wynn Resorts in response to Nevada’s fine, said that under the leadership of the current CEO Matt Maddox, the company had taken a number of steps to make its workplace safer for female employees and more inclusive.

Workplace improvements

They included: “enhanced workplace compliance and prevention of sexual harassment training for all employees, designed and delivered by a third-party expert”; creation of a Women’s Leadership Council to promote equality within the workplace; commissioning of pay and promotion equity studies to measure pay equality among men and women in the workforce; and implementing of a new “diversity, inclusion and unconscious bias training” for all employees taught by third-party experts.

A document referred to as “stipulation for settlement” lodged on the Nevada Gaming Commission’s website, said Wynn Resorts had admitted all allegations regarding the rule breaches – save two paragraphs and part of a third paragraph amid the 116 paragraphs contained in the 10 counts put to the firm.

The two paragraphs concerned whether – respectively – Kimmarie Sinatra, former Wynn Resorts general counsel, group secretary and executive vice president, and Stacie Michaels, former general counsel, knew about allegations from “Employee 7” regarding allegations that Mr Wynn had been accused of “multiple instances of sexual harassment” against flight attendants working for LV Jet LLC, a wholly-owned unit of the group.

The part of a third paragraph not admitted by the group concerned a claim that Maurice Wooden, a former Wynn president, knew of allegations of sexual misconduct as made by “Employee 3”.

The complaint document from the commission, dated January 25 this year, alleged – in count one – as had been reported in the Wall Street Journal newspaper in January 2018 – a female worker at a Wynn salon, described as “Employee 1”, had in 2005 told co-workers she had been raped by Mr Wynn and become pregnant as a result . Mr Wynn has denied all wrongdoing.

The complaint said that the salon’s management had followed company procedures by reporting the allegations to the firm’s human resources department.

Despite this, and the fact that Marc Schorr, former Wynn president and chief operating officer; Doreen Whennen, former vice president of hotel operations, and Arte Nathan, former Wynn senior vice president and chief human resources officer had learned of the allegations, those executives had all “failed to initiate an investigation”; a violation of the firm’s policies and procedures.

The commission complaint said Mr Wynn had reached in 2005 a “private, confidential settlement with Employee 1, in which she and her husband were paid US$7.5 million through a separate legal entity funded personally by Mr Wynn”.