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Wynn Resorts admits wrongdoing, Nevada regulators find more sexual misconduct allegations

Updated January 28, 2019 - 10:41 pm

A former Wynn Resorts employee allegedly facilitated sexual relationships for Steve Wynn and his guests with cocktail servers, the Nevada Gaming Control Board said in a detailed complaint published Monday.

At least seven former Wynn Resorts executives knew of allegations of sexual harassment against the company founder, CEO and chairman over the course of more than a decade and repeatedly failed to investigate them, the regulator said in the 10-count complaint.

The company has agreed to settle the case and try to move past a scandal that turned over its executive offices and board of directors and threatened its ability to open a new resort outside Boston. Any employee who in the regulator’s determination was aware of sexual harassment allegations and did not investigate or report them “is no longer with the company,” Wynn Resorts said in a statement.

Steve Wynn has repeatedly denied all allegations against him, which surfaced in January 2018 and prompted the Gaming Control Board’s review. Wynn eventually stepped down as CEO and later sold all 12.1 million of his shares in the company.

Wynn Resorts said Monday that it had agreed to settle the case with Nevada regulators and that the settlement could result in a fine. However, it contested a few paragraphs in the 22-page complaint, including one stating that former Wynn Las Vegas President Maurice Wooden knew of the allegations. Wooden stepped down earlier this month.

The amount of a fine, if any, is expected to be determined by the Nevada Gaming Commission at its Feb. 28 meeting.

Maddox

The complaint implies that current CEO and Steve Wynn protege Matt Maddox was unaware of the allegations, easing concerns he might be forced out, gaming analysts said.

The report has “no negative implications for Wynn’s current CEO Matt Maddox,” JPMorgan analyst Joseph Greff said in a note.

Monday’s announcement also should reduce fears that Wynn Resorts could lose its gaming license in Massachusetts, Greff said.

Regulators in Massachusetts opened a separate investigation into Wynn Resorts following the allegations last year. The company is scheduled to open its $2.5 billion Encore Boston Harbor resort in Everett in June.

“Given the Nevada Gaming Control Board settlement, we have a hard time imagining there will be a much different outcome in Massachusetts,” JPMorgan said.

The process in Massachusetts has been slowed by a lawsuit filed by Steve Wynn in November alleging that information received by the Massachusetts Gaming Commission’s lead investigator came from privileged communications between attorney and client.

Attorneys for Steve Wynn, Wynn Resorts, the Massachusetts Gaming Commission and investigator Karen Wells appeared in hearings in December and January before Clark County District Judge Elizabeth Gonzalez.

A hearing is scheduled for March 4 involving Wells, who was sued individually as well as in her professional capacity.

Nevada fine

Since the allegations of sexual misconduct surfaced exactly one year ago, Wynn Resorts has enhanced training for all employees, changed two-thirds of the board and added more women to key positions, including head of human resources.

“In my extensive experience working in the highly regulated gaming industry, I have never seen a company take action that was as swift and comprehensive as (the action taken by) the executive team at Wynn Resorts,” Chairman Phil Satre, who joined the board in August, said in a statement.

Anthony Cabot, a law professor at UNLV and former gaming attorney in Las Vegas, said the commission will take into account the significant changes Wynn Resorts has made in considering the amount to fine the company, and he does not expect the commission to impose a record fine.

The highest fine ever assessed by the commission was the $5.5 million penalty given in 2014 to CG Technology, then known as Cantor G&W Holdings.

This settlement represents the first time in history that the Control Board did not negotiate a potential fine amount as part of its settlement agreement.

Nevada Gaming Commission Chairman Tony Alamo, who will preside over the meeting at which the complaint will be considered, said he expects representatives of the attorney general’s office to outline the complaint and then Wynn Resorts will be offered an opportunity to respond, even though the company has waived its right to a public hearing.

Once the testimony has been received, the commission — which now has four members, following Commissioner Sandra Morgan’s appointment to head the Control Board — will deliberate on how much Wynn Resorts should be fined, if at all, and whether the company’s license should be suspended or revoked.

Shares of Wynn Resorts slipped 36 cents, or 0.3 percent, to $118.17. The shares outperformed the S&P 500 Index, which fell 0.8 percent.

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter. Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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