The Massachusetts casino regulator has found gaming resort operator Wynn Resorts Ltd suitable to hold a licence for its US$2.6-billion Encore Boston Harbor project.
But the Massachusetts Gaming Commission imposed a US$35 million fine on the firm, and a US$500,000 one personally on its chief executive Matt Maddox, placing licensing conditions in relation to its finding of his “suitability”.
An investigation into Wynn Resorts’ right to hold a gaming licence in that United States jurisdiction was sparked by allegations – that received widespread publicity last year – that the firm’s founder and former chairman and chief executive Steve Wynn had engaged in sexual misconduct against female staff members in the group. It was subsequently alleged that specific allegations of misconduct had been brought to the attention of some senior leaders but had been covered up by the company.
The Massachusetts regulator said in a Tuesday press release issued at the same time as a 54-page report into its enquiry: “Although the Commission determined that there was a lack of substantial evidence to disrupt the licensee’s suitability status, commissioners were profoundly disturbed by ‘repeated systemic failures and pervasive culture of non-disclosure presented in the Investigations and Enforcement Bureau report and adjudicatory hearing’.”
In relation to Mr Maddox’s role in such matters – the current CEO had been a senior executive in the group prior to Mr Wynn’s resignation in February last year – the Massachusetts regulator was quite specific.
It said the fine imposed on him reflected his “clear failure to require an investigation about a specific spa employee complaint brought to his attention”. That was a reference to a particular allegation brought by a female employee of the group against Mr Wynn.
Earlier this month Wynn Resorts chairman Phil Satre had expressed “full confidence” in Mr Maddox, after the firm had announced the Nevada Gaming Control Board had deemed the CEO “suitable” to hold office at the gaming company.
In February, the Nevada Gaming Commission had already fined Wynn Resorts US$20 million for failing to take appropriate action in response to allegations of sexual misconduct made against Mr Wynn.
Brokerage Union Gaming Securities LLC said in a Tuesday note that the Wynn Resorts project in Massachusetts could “potentially open on time in June 2019”.
“The outcome of the year-long investigation is consistent with our expectations… We anticipated the fine to be greater than what was imposed by Nevada and expected the commissioners to require some form of regulatory probation or ongoing independent monitoring,” wrote analyst John DeCree.
He added: “With [about] US$2.4 billion in the ground in Boston, we expect the company will quickly shift all of its efforts to getting the new property open on time by the end of June.”
In Massachusetts, the regulator decided to impose conditions on its licensing of Mr Maddox. These included Wynn Resorts providing for him “coaching and training” covering matters including “leadership development; effective and appropriate communication for internal, company-wide reporting and messaging”; and “enhanced sensitivity to and awareness of human resource issues arising in complex workplace environments,” on issues such as “implicit bias, hostile work environments, inherent coercion, sexual harassment and assault, human trafficking and domestic violence”.
The regulator also ordered there should be an “independent monitor to review and evaluate the company’s adherence to policies and organisational changes outlined by Wynn Resorts.”
In a statement following the release of the Massachusetts regulator’s report, Wynn Resorts said: “Wynn Resorts CEO Matt Maddox and the board of directors have worked diligently to make the important and necessary changes to the company’s corporate leadership, governance, compliance programmes and human resources policies.”
“With the Massachusetts Gaming Commission review complete, our company is now focused on a successful launch of Encore Boston Harbor…,” the casino firm added.
The regulator’s press announcement stated – quoting the Massachusetts commissioners – in relation to the firm’s treatment of the allegations against Mr Wynn: “The corporate culture of the founder-led organisation led to disparate treatment of the CEO in ways that left the most vulnerable at grave risk. While the company has made great strides in altering that system, this Commission remains concerned by the past failures and deficiencies.”
The Massachusetts findings document noted: “At no time was it our obligation to assess the truth of the allegations that gave rise to this matter. Indeed, given systemic corporate failures, the truth may never be uncovered, which troubled us.”
Wynn Resorts is the parent of Macau casino operator Wynn Macau Ltd. No regulatory measures have been announced in Macau in relation to any of the publicised allegations against Mr Wynn.
Sep 18, 2020The Singapore Tourism Board (STB) has announced several partnerships to support local business and boost the city’s tourism industry, amid the coronavirus pandemic. The tourism board said in a...
”Many investors cite Golden Week as a catalyst to significant, sustainable visitation increases and a showcase for profitability for many casinos [in Macau]... However… we are concerned recovery estimates may again be pushed back”
Analyst at Roth Capital Partners