U.S.-based casino operator Wynn Resorts Ltd and the Nevada Gaming Control Board have reached a settlement regarding a probe the regulator was conducting on alleged sexual misconduct by the firm’s founder and former chairman and chief executive Steve Wynn. As part of the settlement, Wynn Resorts agreed to pay an fine, with the amount yet to be determined, according to the regulator.
In a report disclosed also on Monday, the Nevada Gaming Control Board detailed a number of allegations of misconduct by Mr Wynn dating since 2005, which the regulator concluded people at Wynn Resorts became aware of but failed to act.
The Nevada Gaming Control Board is one of the gaming regulators in the U.S. state of Nevada, where the country’s main gaming hub – Las Vegas – is located. Along with the Nevada Gaming Commission, it governs Nevada’s gaming industry.
“The completion of the Nevada Gaming Control Board’s investigation of the response of certain employees to allegations against our founder and previous CEO Steve Wynn is an important remedial step,” Wynn Resorts stated in a press release.
The firm added: “We have fully cooperated and been transparent with the board in this in-depth investigation… Upon learning of the extent of the allegations, the new leadership of Wynn Resorts took immediate actions to ensure an open and safe work environment for all employees and made dramatic changes at every level of key decision-making in the company.”
The gaming regulator in Nevada started making particular enquiries about Mr Wynn and Wynn Resorts after media reporting in January last year of “sexual misconduct” allegations against him. Mr Wynn resigned from the firm in February last year amid the sexual misconduct claims, which he has denied.
The Wynn group runs two casino resorts in the Macau market via Wynn Macau Ltd.
Wynn Resorts stated in its Monday press release that “any employee mentioned in the Nevada Gaming Control Board report who was aware of allegations of sexual assault against the company’s former chairman and did not investigate or report it is no longer with the company.” The firm did not elaborate on who – or how many people – had been dismissed for covering up the alleged misconduct of Mr Wynn.
The release quoted Wynn Resorts chairman Philip Satre as saying: “I believe our board’s follow-up and reaction to the regulatory investigations has been just as thorough and decisive.”
Wynn Resorts saw a number of leadership changes in 2018, following the downfall of Mr Wynn. The overhaul included the appointment of Mr Satre as company chairman in November, and the appointment of Matt Maddox as chief executive in February. Several of those changes also had an impact on the leadership structure of its Wynn Macau subsidiary.
Carlo Santarelli, an analyst at Deutsche Bank Securities Inc, said in a Thursday note following the announced settlement: “As expected, the Wynn Resorts licence in Nevada remains intact. We believe the conclusion of the investigation relieves a slight overhang for shares, despite not viewing a punitive outcome as being a base case for investors.”
The Deutsche Bank analyst stated he did not expect the size of the fine to be paid by Wynn Resorts to be announced until after the Nevada Gaming Control Board and the Nevada Gaming Commission have settled on an amount. “We do not expect the fine to be overly burdensome for the company and would note that the largest fine in the history of the commission was the US$5.5 million fine paid by Cantor Gaming, whose director of risk management had pled guilty to a conspiracy charge related to an illegal sports betting ring, back in 2014,” he added.
Mr Santarelli also said the settlement with the Nevada regulator could be a positive for Wynn Resorts regarding a similar investigation opened by the gaming regulator in the U.S. state of Massachusetts. “Despite the investigation work being complete, we think the favourable resolution in Nevada bodes well for Wynn Resorts’ status in Massachusetts,” the analyst said.
The Massachusetts Gaming Commission said earlier this month it had finished an enquiry into allegations of sexual misconduct against Mr Wynn and the handling of the case by Wynn Resorts. The regulator however added it would keep the findings on its probe into Mr Wynn – in relation to the group’s Encore Boston Harbor project – under wraps for the time being. That was pending the outcome of a Nevada court case about the confidentiality of some material provided by Wynn Resorts to the Massachusetts Gaming Commission and said to involve communication between Mr Wynn and his legal representation.
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DS Kim, Jeremy An and Christine Wang
Analysts at brokerage JP Morgan Securities (Asia Pacific) Ltd