The Massachusetts Gaming Commission took 25 days to decide that Wynn Resorts Ltd. remained suitable to hold a gaming license in that state and that it wants to fine the company $35 million.
With the planned opening of the company’s Encore Boston Harbor resort just over 50 days away, the company must assess whether it will comply with the commission’s decision.
Company representatives had been mostly silent since the Gaming Commission’s announcement Tuesday afternoon. Late Wednesday, the company responded that opening the property is now its top priority.
“Wynn Resorts CEO Matt Maddox and the board of directors have worked diligently to make the important and necessary changes to the company’s corporate leadership, governance, compliance programs and human resources policies,” the company said in an emailed statement.
Company spokesman Michael Weaver declined to specifically address whether Wynn Resorts will pay the fine that is due to the Massachusetts Gaming Commission within 30 days and/or challenge the regulator’s decision in court.
Additional details are expected when the company presents its first-quarter earnings. An announcement hasn’t been scheduled.
The company’s suitability was in question after an investigation determined that former Wynn Chairman and CEO Steve Wynn and other executives failed to disclose a $7.5 million settlement payment in 2005 to a woman who said he forced her to have sex with him. Steve Wynn has denied harassing anyone.
June 23 opening
The company has set a June 23 opening date for the $2.6 billion resort on the Mystic River in Everett, Massachusetts, and has begun hiring employees and taking room reservations. The company said in its emailed statement that it will recruit and train 5,500 staff for the hotel-casino.
But whether the resort opens on that date rests with the commission and whatever measures the company takes in response to the decision, which includes a $35 million fine against the company and a $500,000 individual fine against the company’s CEO, Matt Maddox.
Fines are payable within 30 days. In Nevada, companies that are fined are required to deliver a check at the time the Nevada Gaming Commission signs a settlement order.
Commission Executive Director Edward Bedrosian on Wednesday cast some doubt on the exact date of the opening at a public commission meeting.
“Now that the commission has reached a decision, there are pre-opening matters that need to be decided by the commission and can only be decided by the commission. To that end, I’m going to ask permission to schedule a public meeting of the decision — and I will say ‘reasonably soon’ — to start to address these matters. I think this would also reflect that between now and the opening date, we may need to schedule commission meetings more frequently and maybe out of order for what our usual every-other-Thursday (schedule) is.”
Bedrosian’s remarks came after Chairwoman Cathy Judd-Stein read a statement and members of the five-member commission fielded questions for about 10 minutes.
“I think the main message that we want to send is how much we feel our role is to secure the integrity of the gaming industry,” she said.
Judd-Stein also explained the purpose of the fine — higher than the record $20 million fine the Nevada Gaming Commission assessed Wynn Resorts in February.
“We were very mindful that it should have the effect of two things, it should serve as a punishment to really address those violations that we felt were the responsibility of certain executives and certain members of the board of directors,” she said. “We also thought it was necessary to provide a message of deterrence to insure future compliance.”
Commissioner Enrique Zuniga said the fact that the company fired or forced resignations from executives who knew of allegations against Steve Wynn but did nothing about it played a role in the commission’s decision.
Commissioner Gayle Cameron said she believed the fine amounts were “commensurate with” the seriousness of the violations and the response and behavior of the executives.
No to Steve Wynn ban
Judd-Stein would not speculate on whether the company would balk at paying the fine and appeal the commission’s decision in court. She also said the commission opted against a suggestion from the company that the commission order Wynn Resorts co-founder Steve Wynn banned from any Wynn property in the future.
“We decided not to incorporate that formally into our conditions, but certainly the company thought it was a good idea and we’ll let them proceed as they see fit,” she said.
Efforts to reach Steve Wynn through his attorney on Wednesday were unsuccessful.
The commission also ordered an independent monitor to conduct a full review and evaluation of all policies and organizational changes adopted by the company as part of the adjudicatory record.
“To really insure the effective implementation, the independent monitor will report back to us on that and that should give us the confidence to know that in fact that change is real,” she said. “And that monitor will be selected by us at the company’s expense.”