Wynn Resorts Fined $35M; Retains License for $2.6B Encore Boston Harbor

BOSTON—The Massachusetts Gaming Commission announced on Tuesday it imposed a $35-million fine on Wynn Resorts and Wynn MA, LLC, the owner and developer of the $2.6-billion Encore Boston Harbor casino resort over its actions in connection with sexual misconduct allegations against former CEO Steve Wynn.

The commission allowed Wynn Resorts and Wynn MA LLC to maintain its license, which paves the way for Encore Boston Harbor to open its doors in June.

The reports of alleged sexual misconduct by former CEO Steve Wynn also resulted in a $20-million fine imposed against the gaming concern by the Nevada Gaming Control Board in late February. The Nevada Gaming Control Board, like the Massachusetts Gaming Commission, allowed Wynn Resorts to retain its gaming license and also both found current Wynn CEO Matthew Maddox suitable to continue in his role as leader of the firm. However, the MGC fined Maddox $500,000 for what the commission found was “his clear failure to require an investigation about a specific spa employee complaint brought to his attention.”

“Ensuring public confidence in the integrity of the gaming industry and the strict oversight of the gaming establishments through rigorous regulation is our principal objective,” said MGC Chair Cathy Judd-Stein. “Our licensees will be held to the highest standards of compliance, including an obligation to maintain their integrity. The law of Massachusetts affords the Commission significant breadth in our decision making. With that comes an equally significant duty of fairness. We are confident that we have struck the correct balance and met our legal and ethical burdens.”

The commission stated in its report, which was based on MGC’s year-long investigation into allegations of sexual assault, misconduct and other inappropriate behavior by former CEO Wynn, and the handling of those allegations by the Wynn firms, “Specifically, the corporate culture of the founder-led organization led to disparate treatment of the CEO in ways that left the most vulnerable at grave risk. While the company has made great strides in altering that system, this commission remains concerned by the past failures and deficiencies.” In reaching its decision, the five-member commission considered all of the facts presented in an Investigations and Enforcement Bureau report, as well as witness testimony and evidence, entered into the record during and after the MGC’s adjudicatory hearing held on April 2-4, 2019.

Wynn Resorts released a statement to Globest.com that said, “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. With the Massachusetts Gaming Commission review complete, our company is now focused on a successful launch of Encore Boston Harbor, and the recruiting and training of 5,500 team members who will be bringing Greater Boston and New England a luxury hospitality and entertainment experience unlike anything the region has ever seen.”

The company then addressed the MGC’s ruling by stating, “In both its decision and in their meeting today, the Commission recognized the importance of the changes the company has made, with Chairwoman Judd-Stein noting in today’s meeting: “It’s fair to say that recent changes to the company’s governance model, policies, trainings, and operations show a new commitment and focus on all levels of employees, which combined with the ongoing successful business operations continue to demonstrate that Wynn will likely be a successful operator in Everett.”

While the commission was critical of the Wynn companies and Maddux, MGC ruled that Wynn could retain its license for Encore Boston Harbor and that Maddux was suitable to retain his leadership role in connection with the Everett casino property. The MGC also praised the company for its governance actions that included “the introduction of a multitude of policy and organizational changes to address employee safety,” the MGC stated. The commission also concluded, “These changes to the company’s philosophy, training, and operations show a new found commitment and focus on all levels of employees, which combined with the ongoing successful business operations, continue to demonstrate that Wynn is likely to be a successful operator in Everett.”

The controversy surrounding the actions of former CEO Steve Wynn began in January 2018 in a report in the Wall Street Journal that detailed alleged instances of sexual misconduct by Wynn, which he denied. Wynn subsequently stepped down as chairman and CEO of Wynn Resorts on Feb. 6, 2018. Maddux was named acting CEO of the company upon Wynn’s resignation. According to the MGC report, the commission was notified that as of April 18, 2018, Wynn had divested his interest in the ownership of the company.

The three-million-square-foot Encore Boston Harbor casino resort is under construction and is located less than five miles from Logan International Airport. It is the largest single-phase private development in the history of Massachusetts. The resort, which is scheduled to open in June, will feature a 27-floor hotel with 671 rooms, including 104 luxury suites; 15 restaurants and lounges ranging from waterfront casual to fine dining; a spa, fitness center and beauty salon; state-of-the-art convention and meeting space, including a 37,000 square-foot waterfront grand ballroom, 10 break-out rooms, and promenade; a gaming floor with more than 4,000 gaming positions and a six-acre, four-season public harborwalk and park.