Now that the Massachusetts Gaming Commission has announced its $35 million fine against Wynn Resorts Ltd. — a record amount for any gaming jurisdiction in the United States — the Las Vegas company can get back to work constructing the $2.6 billion Encore Boston Harbor, and we can relax.
Or can we?
Industry watchers still are coming to terms with the punitive measures against Wynn, which has the opportunity to refute them. Meanwhile, the company is sticking with a opening date of June 23. How could that be affected by how the company proceeds?
Most industry watchers felt it was a foregone conclusion that Wynn would be allowed to keep its gaming license in Massachusetts, put in jeopardy after the company failed to respond appropriately to reports that former Chairman and CEO Steve Wynn was sexually harassing female employees for years. He has denied the allegations.
What else were the regulators going to do? Risk the property not opening and send thousands of workers already hired to the unemployment line?
Most expected that the company would be assessed a hefty fine. While some Boston media were advocating a $100 million fine, the $35 million assessed against Wynn and the $500,000 CEO Matt Maddox was hit with individually got plenty of attention. The company fine surpassed the previous nationwide high — the $20 million assessed against Wynn by the Nevada Gaming Commission in February for violating regulations regarding damaging the reputation of the state’s gaming industry. Massachusetts commissioners felt the amount appropriate to serve as punishment and a deterrent.
The question that remained in people’s minds was whether the Massachusetts Gaming Commission would require the removal of Maddox as CEO as a condition for keeping the license.
Regulators didn’t do that, but they delivered a public dressing down of Maddox that could sting as much as the $500,000 fine. It’s also fair to say he didn’t come off very well when regulators grilled him in the April 2-4 adjudicatory hearing in Boston.
Based on the tone of the questioning from commissioners and some of the comments they made during the hearing, the worst moment may have been when he was asked to detail the new sexual harassment policies implemented by Wynn in the past year and he had trouble recalling all of them without notes in his hands. Commissioners were probably expecting him to rattle them off quickly because the topic should have been top of mind.
No matter. That’s history, and the focus now is on opening the new resort and seeing how the company responds to punishment.
There could be some commentary on that as early as next week when Wynn Resorts has the spotlight to announce its first-quarter earnings.
Would it fight the $35.5 million in fines? Massachusetts regulations have no avenue for appeal within their structure, so any review would have to occur within the state’s courts. The company has 30 days from the date of the decision, or until around May 29, to pay the fines — a departure from Nevada rules that require payment on the date of adjudication.
The date of Encore Boston Harbor’s opening may also be in question. Wynn long ago announced a planned June 23 opening. But at the Massachusetts Gaming Commission meeting last week, Executive Director Edward Bedrosian plotted the course for commission meetings leading up to pre-opening and final approval of the potential opening — and he emphasized the word “potential.”
Wynn and the commission obviously have to work together to get the building open, which is why it’s hard to imagine that the kinder and gentler Wynn — the company that has remade its board to nearly half women; that initiated a satchel of new policies, including a progressive family leave program; that donated $1 million to Massachusetts charities in April; that scrapped its despised paid parking plan in Las Vegas last week; that has publicly apologized for many wrongs against women — would test regulators’ patience in Massachusetts.
And through it all, many of us are still wondering: Where is Steve Wynn in all this, and what is to happen with him?