The Massachusetts Gaming Commission will conduct three days of hearings this week to consider the suitability of Wynn Resorts to hold a state license to operate the casino the company is building in Everett.
The future of the casino was thrown into doubt following allegations of sexual misconduct against the company's founder, Steve Wynn. The Gaming Commission's Investigations and Enforcement Bureau conducted an investigation, and now the five commissioners will have the chance to question the company's executives directly. Here's what you need to know about this week's hearings, and what's on the line for Wynn Resorts.
The Allegations
The Massachusetts investigation started after the Wall Street Journal reported in January 2018 that several women alleged Steve Wynn sexually assaulted or harassed them. Wynn paid a $7.5 million settlement in 2005 to a former nail salon employee who accused him of rape. He also paid a $975,000 settlement to another casino employee who says he pressured her into a non-consensual sexual relationship.
Steve Wynn resigned as the company's CEO and chairman and sold all his stock after the allegations became public, even as he denied the allegations against him. But that wasn't enough to satisfy the Massachusetts Gaming Commission. They wanted to know what company executives knew about the allegations and settlements and when they knew it, and they launched an investigation.
The Investigation
Wynn Resorts conducted its own internal investigation, and shared its report with the Gaming Commission's investigators. That prompted Steve Wynn to file a lawsuit against the commission and against his former company, claiming that the information in the internal report was protected by his attorney-client privilege. That lawsuit held up the completion of the Gaming Commission's investigation, and was finally settled in March when the Gaming Commission agreed to give back the internal report without making it public. The head of the commission's Investigations and Enforcement Bureau (IEB) will testify, however, that she's seen the internal report, and that it's not substantively different from what the commission's own investigation found.
The IEB has given its investigative report to the five commissioners, who have said they plan to make the report public this week.
Nevada Ruling
Meanwhile, state gambling regulators in Nevada conducted their own investigation into the company's response to the allegations, and fined the company a record $20 million in February. The Nevada investigation found that several former executives and board members knew about the allegations and the two settlements, but failed to investigate.
Wynn Resorts' Response
The company claims it has undergone a corporate transformation over the last year. That included a review of its harassment and human resource policies, as well as an almost complete change in the company's leadership. Wynn Resorts says anyone who was aware of the allegations and who failed to report it is no longer with the company. The company also changed the name of the Everett casino project, dropping the "Wynn" from the name, and renaming it "Encore Boston Harbor."
This Week's Hearings
Wynn Resorts will answer to the state's Gaming Commission over three straight days of hearings, starting Tuesday. The commission's own Investigations and Enforcement Bureau and Wynn executives will answer questions from the five gaming commissioners. The commissioners want answers to a number of questions about whether the company and its individual executives failed to meet suitability standards and/or provided false or misleading information in its initial gaming license application.
Since the hearings are likely to draw a bigger crowd than the usual commission meetings, they'll happen at the Boston Convention and Exhibition Center, rather than the usual location at the commission's offices.
The commission will then deliberate in a closed session before issuing a written decision.
Possible Outcomes
If the commission finds, as Nevada regulators did, that Wynn Resorts and its executives acted improperly, the company could be charged a significant fine, or even lose its license.
Construction at the $2.5 billion Everett casino is nearly finished, and it's scheduled to open in June. If the company were to lose its license, Mohegan Sun, which runs a casino in Connecticut, has expressed an interest in buying the Boston-area casino.
Information from the Associated Press was used in this report.
