THE MASSACHUSETTS GAMING COMMISSION said on Wednesday that its investigation of Steve Wynn could lead to the revocation of the Wynn Resorts casino license in Everett and indicated the early focus of the probe would center on a $7.5 million settlement the Las Vegas casino mogul paid to a former manicurist at the company.
The settlement was a key element of a Wall Street Journal story published on Friday that said Steve Wynn had pressured the manicurist to have sex in 2005 and also engaged in a “decades-long pattern of sexual misconduct.” The allegations in the article raised questions about whether Steve Wynn met the very broad “suitability” standards required of applicants and holders of casino licenses in Massachusetts.
Karen Wells, director of the commission’s investigations and enforcement bureau, said the Wynn Resorts legal counsel confirmed to her that there had been a $7.5 million settlement and that it had not been disclosed to Massachusetts officials when they were originally investigating the suitability of the company and its principals in 2013.
Wells said the Wynn legal counsel “confirmed that the settlement itself was not part of any court action or litigation and that no lawsuit was filed at any time. There were no court documents filed that could have been identified in the course of the investigation. This was a private agreement and steps were taken to keep it from the public domain. The circumstances around this $7.5 million settlement and the decision not to disclose it to investigators remain a crucial element of this review.”
Wells said her office’s investigation would focus on the suitability of Wynn and other top officials at the company, the Wynn Resorts response to alleged misconduct by Wynn at the time it allegedly happened, the corporate response now that the sexual misconduct allegations have been raised publicly, and an examination of how “the current situation potentially impacts the financial stability of the company.”
The five commissioners said they would await the results of the investigation before jumping to any conclusions, but four of them stressed that they would be watching the action of the Wynn Resorts board very closely to see how it responded. They also said any lack of cooperation by the company with the Gaming Commission investigation would be frowned upon.
The comments suggested decisive action by the Wynn Resorts board could possibly clear the air and allow the $2.4 billion Wynn casino/hotel project in Everett to keep moving forward. (A subcommittee of the Wynn board is currently investigating the allegations against Steve Wynn.)
But separating Steve Wynn from Wynn Resorts may not be easy. His name is also the name of the company and his signature is emblazoned on its hotels. The company’s most recent proxy statement described Wynn as “the founder, creator, and name behind our brand.” The firm’s risk disclosures have at the top of the list “our dependence on Stephen A. Wynn.”
Wells said the suitability of each principal employee at Wynn is a component of the overall suitability of Wynn Resorts. “Therefore, any potential commission finding regarding Steve Wynn’s or any other qualifier’s suitability will potentially impact the suitability finding of Wynn Ma LLC.” Wynn Ma is the name of the Wynn Resorts subsidiary building a casino and hotel in Everett.
Under the state’s gaming law, the Gaming Commission has wide latitude to declare Wynn unsuitable. Suitability goes to “integrity, honesty, good character, and reputation,” according to the law. The law also specifically states that a key gaming employees can be deemed unsuitable if he or she “committed prior acts which have not been prosecuted on in which the applicant was not convicted but form a pattern of misconduct that makes the applicant unsuitable for a license.”
The Gaming Commission’s legal counsel said Steve Wynn or any other Wynn Resorts employee is entitled to a public hearing before any action is taken against them.
Stephen Crosby, the chairman of the Gaming Commission, said he delayed a vacation to Hawaii to attend Wednesday’s meeting. “The stakes are enormous and many lives are involved—from the lives of the women allegedly abused, to the lives of men and women in Everett now building the project, to the senior executives and board members of Wynn Resorts. We will get this right and we will get it right as quickly as we can,” he said.
After the meeting, Crosby declined to speculate whether the commission would actually pull the Wynn Resorts casino license. License revocations have happened in other jurisdictions, including Missouri in 2000, when the licenses belonging to Station Casinos were revoked. Station ended up selling its casino properties to Ameristar Casinos at a $125 million loss, according to press accounts.
“I don’t want to speculate on it. I don’t know what’s going to happen. I don’t know what the facts are going to be,” Crosby said. “I think for the time being everybody who’s got jobs in Everett should go about their business and feel fine. This is not the first time that there have been allegations of misconduct against major players in the casino business. We will resolve this one way or the other. I can’t predict what the outcome will be.”