Wynn Earns High Marks in Massachusetts for Enhanced Sexual Misconduct Policies

Posted on: May 23, 2020, 12:32h. 

Last updated on: May 23, 2020, 06:31h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Wynn Resorts earned a mostly glowing report from the law firm hired by the Massachusetts Gaming Commission (MGC) to evaluate the operator’s efforts and policies to limit sexual misconduct at the Encore Boston Harbor property and throughout the company.

Wynn Gets Glowing Report On Sex Misconduct
The law firm tasked with evaluating Wynn sexual misconduct policies gave a glowing report to Massachusetts regulators. (Image: Boston Globe)

The law firm Miller & Chevalier recently spent close to three hours reviewing a 127-page report with the MGC on its monitoring of Wynn CEO Matt Maddox and his executive team.

Wynn’s commitment is reflected in some of the changes already implemented at the company and in the company’s demonstrated willingness to continue to build upon those changes,” according to the law firm.

Just weeks before the company opened Encore Boston Harbor last June – its first US integrated resort outside of Las Vegas – the MGC delivered a record $35 million fine against Wynn, alleging the company was complicit in covering up sexual misconduct allegations against founder and former Chairman and CEO Steve Wynn.

A $500,000 penalty was levied directly against Maddox, along with the requirements that he and high-ranking executives be monitored by Miller & Chevalier at company expense. Speaking of costs, the year of monitoring resulted in a tab of $830,000, well above the original estimate of $575,000 to $775,000.

Not All About Misconduct

The Miller & Chevalier report, which pertains to a six-month period starting last September, notes Maddox has been “generous with his time and resources,” and says there are noticeable improvements in company policies, including enhanced transparency, to better deal with sexual misconduct issues, should they arise.

Upon agreeing to monitoring program last year, Maddox appeared fine with it, saying that in the gaming business, someone is always watching, whether it’s customers, employees, or regulators.

The Miller & Chevalier monitoring submission wasn’t confined to Wynn’s efforts to prevent sexual harassment issues. It also included financial comments on the health of the Everett, Mass. property, noting that some executives are concerned about the venue’s slow start and the time it’s taking to fully ramp the property up.

Likewise, employees interviewed by the law firm are worried that the operator isn’t supporting Encore Boston Harbor the way it is its two Macau and two Las Vegas integrated resorts.

Maybe Something to Those Concerns

Encore Boston Harbor opened in late June 2019 and quickly became the highest-grossing casino in the Bay State. But it also became apparent that $800 million in first year gross gaming revenue (GGR) – Wynn’s initial forecast – would be difficult to meet.

The property notched just eight full months of business before being shuttered in mid-March by the coronavirus pandemic.

Massachusetts casinos remain closed, and while the MGC is reviewing plans to reopen those venues, the regulator extended the closure period three times. Industry observers are saying Bay State gaming properties will likely be the last to reopen in the US, as MGC isn’t giving a ballpark estimate as to when that will happen.

As part of its plans submitted to the MGC, Wynn said it will eliminate poker and only offer craps in the VIP area of the casino.