Thu, May 2, 12:29pm by Staff Writer
Gambling regulators in the American state of Massachusetts have come down hard on Wynn Resorts, fining them US$35 million (A$50 million), but is crucially allowing the company to keep its casino licence after executives failed to disclose allegations of sexual misconduct against company founder Steve Wynn.
The Age is reporting that the Massachusetts Gaming Commission also fined CEO Matthew Maddox US$500,000 for his ‘clear failure’ to require an investigation of at least one misconduct complaint he’d been aware of.
It also required the Nevada company, which also owns properties in Las Vegas and Macau, to be subject to review by an independent firm selected by the state as a condition of maintaining its licence.
Wynn Resorts and lawyers for Steve Wynn didn’t respond to emails seeking comment on the late evening decision, which effectively clears the way for the opening of the company’s US$2.6 billion Encore Boston Harbour resort in June.
The long-awaited decision comes after the commission released a report last month of more than 200 pages, held tree days of public hearings and deliberated for nearly four weeks on what company officials knew and did about the allegations.
Steve Wynn has denied the claims, saying his relationships with female employees, many of them spa workers and cocktail waitresses, had been consensual.
Massachusetts gaming regulators on Tuesday fined Wynn Resorts US$35 million for not disclosing sexual misconduct allegations against founder and former CEO Steve Wynn but allowed the casino… https://t.co/r8vVAoTtGz
— China Daily Events (@cdroundtable) May 2, 2019
He resigned as CEO last year after the Wall Street Journal first reported on the allegations.
Nevada regulators, after an investigation similar to Massachusetts’ earlier this year, levied a US$20 million fine on the company, but also allowed it to retain its casino licence.
Regulators in both states were focused on how long company officials were aware of the allegations and how they responded, rather than the truth behind the claims.
In Massachusetts, gambling investigators found company officials were aware of many of the allegations but failed to report them to internal investigators or take other steps mandated in the company’s sexual harassment policies.
They also found Wynn officials failed to disclose to regulators settlements paid out to Steve Wynn’s accusers during their initial application for a casino licence.
Among them was a US$7.5 million Steve Wynn personally paid in 2005 to a former salon employee who alleged she’d become pregnant after Wynn raped her.
Massachusetts regulators also found Wynn executives were aware but didn’t disclose at least three other complaints casino massage therapists brought against Steve Wynn as the company was being vetted by the state from 2013 to 2014.
Wynn Resorts officials argue the company has fundamentally changed since the scandal.
Every top executive that actively covered up or failed to act on the allegations has been fired.
The board of directors saw an infusion of new members, including three women, and new sexual misconduct policies have been instituted, such as the creation of an oversight panel to review sexual harassment claims led by a former Boston police commissioner.
Gaming Commission members during their April hearings directed pointed questions at Maddox, who has been with the company since its founding and is a close ally of Steve Wynn.
Commission members criticized Maddox for authorizing spying on employees named in the Wall Street Journal’s story, but not actually investigating the sexual misconduct claims.
When asked by the commission members to name at least one of the company’s new sexual harassment policies, Maddox wasn’t able to.
Maddox acknowledged that he should have informed regulators about the allegations in 2018 because he and other company officials were aware of the Wall Street Journal’s reporting weeks prior to publication.
He also testified he’d been aware of a 2008 settlement as the company’s then chief financial offer, but maintained he was told the payment was to help a financially struggling employee.
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