It’s summertime in Vegas, and the pressure on two corporate giants is ratcheting up in the August heat.
Wynn Resorts Ltd., the most luxurious brand on the Strip, has spent six months restoring the company’s image after allegations of sexual harrassment against former chairman and CEO Steve Wynn prompted his resignation in February. The company also hopes distancing the company from the man will preserve its $2.4 billion investment in Massachusetts.
And MGM Resorts International has been busy making moves to stabilize the company’s value after the mass shooting of Oct. 1. The company also is trying to meet the high expectations of the investment community that saw 2017’s third quarter, which included the well-attended Conor McGregor-Floyd Mayweather bout, as a new standard.
Industry observers are anxious to find out if Wynn’s moves have been enough to dodge potential regulatory bullets and whether MGM’s garnered enough public support.
The heat is on.
In the past six months, Wynn has:
■ Chased Steve Wynn off the property and out of the company before due process was completed.
■ Settled legal disputes with Aruze Corp. and Elaine Wynn to get itself out of potentially expensive court battles.
■ Added three highly qualified women to its corporate board of directors, moving the company from one of the least diverse boards to one of the most diverse in the industry. At the same time, it agreed to provide a series of quarterly forums addressing women’s issues.
■ Removed — without much explanation — Executive Vice President Kim Sinatra, the company’s top lawyer, who was considered second-in-command behind new CEO Matt Maddox. It replaced her with Las Vegas gaming attorney Ellen Whittemore.
■ Ramped up renovations and additions in Macau while tamping down investment at Wynn Las Vegas.
■ Established a partnership with The Shade Tree Shelter for homeless women and children to finance facility construction and renovation.
■ Appointed respected longtime gaming industry executive Phil Satre to chair the board of directors next year. Shortly after that, Maddox and a banking industry ally also were added to the board.
Will the moves be enough to satisfy investors who are expecting regulators in Nevada, Macau and Massachuseets to complete investigations into Steve Wynn and the company by the end of summer?
Meanwhile, the jury is out on how MGM will endure the backlash from some of the decisions it has made, including:
■ Lowering room rates. MGM told investment analysts in its second-quarter earnings call that the third quarter won’t meet financial expectations, primarily because there aren’t as many big Vegas events as there were last year and efforts to secure small corporate meetings to fill the gaps failed.
■ Pursuing a legal strategy to sue victims of the Oct. 1 shooting to consolidate cases in federal court. The public clearly misunderstood that the company was not seeking damages, and the hit to the company’s image was compounded when MGM Chairman and CEO Jim Murren had to issue an apology to his employees for not explaining the strategy before it went public.
Social media critics savaged the company’s stances on the lawsuits and on parking and resort fees. In addition, early feedback on MGM’s most recent controversial move — adding a new 20 percent service charge on spa and salon treatments — has been mostly negative.
But the company also has some big positives on the horizon:
■ MGM is primed to compete for a gaming concession in Japan now that the enabling legislation has been approved. But so is Wynn and a half dozen other competitors.
■ It’s forming alliances with the NBA and Boyd Gaming Corp. in a bid to dominate the expansion of sports wagering. But one of the first questions of NBA Commissioner Adam Silver when the deal was announced was along the lines of, “How could you partner with a company that’s suing shooting victims?”
■ MGM’s property in Springfield, Massachusetts, is planned to open Aug. 24. But the company is bound to get more flak when critics start talking about the casino’s free parking, while it implemented parking fees in Las Vegas in June 2016.
The company is even encouraging people to park there for nothing when they visit downtown Springfield.
Will MGM endure the heat? Again, stay tuned.