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Wynn preparing for regulatory announcement

Wed, May 1, 2:13pm by Staff Writer

Wynn Resorts has won endorsement from two proxy advisory firms for proposed board changes as the gambling giant looks to repair its damaged corporate reputation with an impending regulatory decision set to be handed down.

The Financial Review is reporting that the Massachusetts Gaming Commission may announce as soon as Wednesday (Thursday AEST) whether Wynn should retain a lucrative casino licence for its new hotel in Boston.

The Boston decision is shaping as a major issue for Australian investors in James Packer’s Crown Resorts.

If the commission clears Wynn, it could reopen a path for the company to resume this month’s abruptly aborted talks over a potential merger this Crown Resorts, as revealed last month.

Wynn has been under the microscope since January last year over its handling of sexual misconduct allegations against its founder Steve Wynn.

The company has been on the offensive in trying to repair its public image, with changes to the management and board, as well as large donations to charities.

A spokeswoman for the Massachusetts regulator Elaine Driscoll said the commission was “in the final stages of deliberations”.

“I do anticipate a written response soon, but do not yet have an exact time frame,” she wrote in an email to the Financial Review on Monday.

The commission is scheduled to meet on Wednesday in Boston.

Encore Boston Harbour hangs in the balance

Wynn plans to open in June its $3.7 billion Encore Boston Harbour casino, which it could be forced to sell if the licence were withdrawn.

The Boston Globe newspaper has argued the company should be fined US$100 million but he allowed to continue with its plans to operate the casino.

Wynn announced that proxy advisory firms Institutional Shareholder Services and Glass Lewis & Co have recommended shareholders vote for all the company’s board proposals at its annual meeting next week in Las Vegas.

Both firms applauded the management’s year-long “outreach to understand and address shareholder concerns” and backed the re-election of three directors, Jay Johnson, Margaret Myers and Winifred Webb, Wynn said in a statement.

Wynn chairman Philip Satre said over the past year the company had taken “decisive action to improve our culture and governance”.

“As we lead Wynn Resorts into the future, we will continue to seek input from all of our stakeholders and action on matters that are in the best interest of our guests, our employees and our shareholders. We appreciate the validation ISS and Glass Lewis provided to us, through their rigorous reviews of the progress we’ve made.”

A 200-page report dated March 15 by the Massachusetts Gaming Commission investigators found Wynn made “significant” and “repetitive” failures to manage the misconduct allegations against Mr Wynn, who has denied any wrongdoing.

Wynn chief executive Matt Maddox has insisted the company has cleaned up its act and took the unusual step recently of banning Mr Wynn from the company’s casinos.

Glass Lewis said in its statement, published on Monday, that there had been a “very high level” of “refreshment” of management and the board.

“As well as the remedial actions taken by the company following Mr Wynn’s ouster, we do not believe it is necessary for shareholders to oppose the election of any of the board’s current directors based on the failings of former company officials detailed by the [Massachusetts Gaming Commission] and [Nevada Gaming Control Board] reports,” it said.

Nevada’s regulator fined the company a record US$20 million this month, but allowed it to continue operating in the state, where it is based.

Mr Packer’s stake in Crown would be worth $4.6 billion at the implied takeover proposal price of $14.75 according to reports, after the mooted $10 billion buyout of Crown on April 10.

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