Wynn Disputes Massachusetts Findings on CEO but Pays $35.5M in Fines to Settle Case
Posted on: May 30, 2019, 05:36h.
Last updated on: May 30, 2019, 05:36h.
Wynn Resorts on Tuesday announced, as expected, that it would not appeal a $35 million fine handed down earlier this month by the Massachusetts Gaming Commission (MGC) for failing to reveal sexual misconduct allegations against the company’s founder as it sought a gaming license for a Boston-area casino.
In the statement, the company’s board said it looked forward to the opening of Encore Boston Harbor, the first five-star casino resort in New England on June 23.
The commission imposed the levy on April 30, ending an investigation that started in early 2018 regarding the misconduct allegations against Steve Wynn. In particular, the MGC issued the large fine because the company did not disclose the information when it began the license application process six years ago, even though it did reveal it to the Nevada Gaming Control Board (NGCB).
“This failure shows that the company did not appreciate the value if its Massachusetts license,” the commission noted in its findings last month.
In addition to the fine, the MGC stipulated that Wynn must refrain from having one person serve as both the board chair and CEO for 15 years, the duration of the license. The company must also report any criminal or civil complaints filed against it to the commission immediately upon notice.
The commission, however, did note that the current corporate leadership was suitable for the license.
Maddox Fine Questioned
The commission also levied a $500,000 fine against current Wynn CEO Matt Maddox, a decision that left the Wynn Board puzzled.
Massachusetts officials were divided whether Maddox was suitable to lead the company, but they added they were all in agreement he, when serving as president under Steve Wynn, did not take proper action when he learned of sexual harassment allegations against Wynn.
In addition to the fine, the commission called for an executive coach to be hired to help Maddox with leadership development and sensitivity toward human resource issues.
The Wynn Board statement said the NGCB’s investigation of the matter noted Maddox has created a paradigm shift within the company since replacing Steve Wynn.
We believe Matt’s leadership has been, and will continue to be, essential in our transformation from a founder-led company to an innovative global corporation,” the statement said. “Matt has created a more diverse, inclusive and respectful workplace culture – all while maintaining focus on executing the Company’s business plan.”
Wynn’s directors said they support an appeal by Maddox as they think the commission’s findings weren’t supported by the evidence. However, Maddox chose not to proceed with the matter “to allow for closure,” and the company will pay his fine.
With less than a month before Encore’s scheduled opening, the Board said its working with the MGC to develop a plan to implement the commission’s requirements for the company.
Wynn won the license for the casino, which is located in Everett, in November 2014. However, a number of lawsuits delayed the start of work on the 27-story tower for nearly two years.
When it opens in Everett, just north of Boston, Encore will employ more than 5,500 workers. The 212,000-square-foot casino will hold more than 3,100 slot machines and more than 240 table games.
Earlier this month, reports circulated that MGM Resorts was in talks to purchase the casino from Wynn. However, both sides agreed to end the talks and MGM said it would focus its efforts on the casino it runs in Springfield.
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