Wynn Operators Fined $35M for Covering Up Sexual Misconduct Allegations
May 3rd, 2019 2.00pm
A scandal of epic proportions is shaking down the cores of the Wynn empire as the former CEO and co-founder stands accused of sexual misconduct. The allegedly lewd behaviour of Mr Steve Wynn couldn’t have been “exposed” at a worse moment for the Wynn resort operators, who are in the midst of preparations for cutting the red ribbon of their new casino Encore in Everett, Massachusetts…
The Encore Boston Harbor Resort Licence No Longer Under Discussion
The shady past of Steve Wynn and the misguided decision of the Wynn Resorts executives to turn a blind eye to the accusations against the Las Vegas mogul have almost ruined the Encore casino’s $2.6 billion deal. While the truth behind the claims is yet to be revealed, the fact that they were ignored for years endangered the future of the project, which, until recently, was facing an uncertain fate.
The State’s Gaming Commission panel, however, decided against revoking the licence and the grand opening is back on schedule. Mr. Wynn, on the other hand, is not out of the woods yet, since the formal investigation of the rape charges is still in progress.
The code of silence was paid dearly, but the new CEO Matthew Maddox might think otherwise, even with the $500,000 he will need to cash out for failing to divulge the compromising allegations. Wynn executives’ dirty little secret will cost the company $35M, but it will salvage billions invested in the new casino property. Considering the fact that Steve Wynn is a billionaire, one can easily assume that he will be gracious enough to reimburse the $500,000 fine levied on his good pal Maddox.
The $35M fine is a precedent and, according to the Commission Chairwoman, the amount of money corresponds to the amount of time Wynn officials held their peace.
“We do feel like the fine reflects the scope and multitude of the violations”, stated Cathy Judd-Stein, the Chairwoman. “We were very mindful that it should serve as punishment to really address the violations. We also thought that it was necessary to provide a message of deterrence to ensure future compliance”. Looking at the size of the fine, one could easily assume that the silence was long and expensive, but the numbers tell a different story.
Nickels and Dimes…
For a company that’s about to launch a new resort which is worth billions in investments, that’s exactly what this fine is – nickels and dimes. Even with the $20M fine imposed by the Nevada Gaming Commission in February this year, one may consider that Wynn got away lightly.
According to certain estimates, $35M is what the company expects to generate with the soon-to-open resort in no more than a month. It is also close to the revenue that Wynn earns in its Las Vegas and Macau venues in less than 48 hours, which, ultimately, makes the fine laughable.
Where Will the Money Go?
The money (due in the next 30 days) will be distributed according to the standard gambling proceeds allocation formula, which prioritizes aid to towns and cities, public transportation, education, state reserve funds, state debt, long-term liabilities, and other pressing issues. Little is known about how the numbers are crunched to produce a total of 32,000,000 and the Commission members have cordially declined to disclose the details.
“We are confident that we have struck the correct balance and met our legal and ethical burdens” briefly commented Judd-Stein.
Wynn representatives reported that they are still discussing their strategy and it remains to be seen if the company will request the state court review of the decision.
Wynn Resort in Las Vegas