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Wynn under the microscope

Thu, Apr 4, 9:08am by Staff Writer

The Sydney Morning Herald has reported explosive allegations that executives at Wynn Resorts had concealed allegations of sexual misconduct against the company’s founder, Steve Wynn, for years, if a report by Massachusetts casino regulators is to be believed.

The 200-page report by the state Gaming Commission doesn’t make a recommendation about the fate of the company’s Massachusetts casino licence or its nearly US$3 billion Boston-area resort slated to open in June.

It does conclude by saying that recent reforms touted by the company – including the resignation of Mr Wynn as chief executive officer and the ousting of every official who knew of the allegations but failed to report them – does not “erase the fact that the corporate failure revealed in this investigation are significant, repetitive and reflective of the company’s historical governance practices.”

Mr Wynn stepped down in February following the allegations.

The board “reluctantly” accepted his resignation at the time, with the company remarking in a statement that they appointed Matt Maddox, its then president, as chief executive officer immediately.

“In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity,” Mr Wynn said in a statement.

“As I have reflected upon the environment this has created – on in which a rush to judgment takes precedence over everything else, including the facts – I have reached the conclusion I cannot continue to be effective in my current roles.”

Wynn had been in the spotlight since the Wall Street Journal published a report in January that alleged he pressured employees for sex and paid US$7.5 million to settle claims brought by a former manicurist at his Las Vegas resort.

Wynn, 76, has denied any wrongdoing, calling the claims “preposterous” and saying they were instigated by his ex-wife to seek advantage in their divorce lawsuit.

His exist sets up a challenge for a company whose glamorous image has long been tied to its founder.

Wynn is an icon in Vegas

Wynn started in Las Vegas casinos in the 1960s, creating some of Las Vegas’ most iconic landmarks – the Mirage, Bellagio and Treasure Island.

He was forced to sell his multi-billion dollar operation Mirage Resorts to tycoon Kirk Kerkorian in a hostile takeover in 2000.

Kerkorian then created MGM Mirage and Wynn went on to create Wynn Resorts with his ex-wife in 2002.

There are no plans to change the name of the casino company despite Wynn’s departure, said a company source.

Wynn still lives on Wynn Resorts’ Las Vegas property, in a villa he rents.

He wasn’t in attendance at this week’s report in Boston, with Brian Kelly, a Boston-based lawyer representing him saying that the report does not address the truth of the allegations against his client.

“Mr Wynn denies all allegations of non-consensual sex and nothing in this report changes that,” he said in an emailed statement.

“In fact, the Commission and its investigators have acknowledged today that it’s not their role to decide the truth or falsity of those allegations and that Mr Wynn’s conduct is not the focus of their hearing.”

The report was released as the commission opened a series of hearings on whether Wynn Resorts can continue to hold a state casino license.

The hearings have implications for Encore Boston Harbor, the company’s Everett casino.

Wynn Resorts didn’t dispute the facts of the report and said in a statement that it represents a “complete review of matters related to the company’s founder.”

Matt Maddox told the commission Tuesday he’s “deeply remorseful” for the harm inflicted on the accusers.

“I am sorry that our company did not live up to its values,” he said in brief opening remarks.


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