Wynn announced his resignation on Feb.6 but has denied the allegations.
In a statement, Wynn said, “As I have reflected upon the environment this has created — one 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 is the company’s namesake and now former CEO and Chairman of the Board. While his resignation has taken some of the heat of the company, it wasn’t enough to completely insulate the company from further scrutiny.
The company is being investigated in multiple jurisdictions. Moreover, in Massachusetts, its gaming license could even be on the line.
“There are still concerns whether Steve Wynn has control, stock ownership, and those types of things,” said Ed Bedrosian, executive director of the Massachusetts Gaming Commission. “We’ll have to find out what the resignation actually means.”
That would be an unprecedented development, considering Wynn Resorts is in the process of building a $2.4 billion casino just outside Boston.
Massachusetts faces big test
Massachusetts is a new player in the casino industry. However, the Bay State already has a reputation as a serious regulatory regime. The state’s gaming board set the gold standard on several fronts, most notably for its transparency and responsible gaming policies.
Beyond that, the state has been lauded for its measured approach to casino expansion, including the awarding of licenses.
The Wynn project is shaping up to be the first major test for the state’s gaming commission. Major outlets like the Boston Globe are calling on the Massachusetts Gaming Commission to consider revoking Wynn Resorts’ license.
But doing so could wreak havoc on the state’s fledgling casino industry. The fallout could include lawsuits and injunctions that would stall the project indefinitely.
Even if the MGC is justified in revoking the Wynn license at this point in time, it might not want to. Construction is well underway. The MGC would not only have to find a new company to take over the license, it would have to find a company willing to take over the ambitious project.
Few casino corporations are in the habit of building multi-billion dollar casinos. The ones that are capable of tackling such a major building project aren’t in the market for reclamation projects. Any company interested in a multi-billion dollar Boston casino is going to want to design it from the ground up. Taking over a half-complete project would be a tough sell to stockholders.
Who knew what, and when?
How the MGC responds will depend on what its investigation turns up.
The MGC has been blindsided by the allegations against Wynn, particularly the $7.5 million settlement with a former employee that wasn’t disclosed to the MGC during the suitability investigation.
MGC Chairman Stephen Crosby made it clear, Wynn Resorts’ license will depend on what and when the Wynn board knew about the allegations and settlement. The board will also need to explain why it wasn’t disclosed to the MGC.
“A central question is what did the board of directors and central staff know, and when did they know it,” Crosby told local press.