March had some shocking moments for the gaming industry. In separate events two industry giants suddenly walked off, if not into the sunset, at least into the clubhouse. Both were evolutionary moments; in the blink of an eye, the gaming industry evolved. There are two dominant theories in evolution; one says that change to a species takes place slowly over long periods of time, often in the millions of years. The other theory holds that there are long periods of no change – stasis – followed by sudden and dramatic change – called “punctuated equilibrium.” Think of dinosaurs and comets.
In the 1990s, I was coordinating the gaming series of the Oral History Department of the University of Nevada, Reno. We used the punctuated equilibrium concept; interviewers were taught to look for events that made instantaneous switches in direction for the subject. I thought of it in terms of a person walking along the road, when out of the woods jumps an assailant who punches the walker in the side of the head. In one moment, the person is facing in another direction and continues walking, but on the new and unexpected path.
That happened to two industry legends. Steven Wynn and James Packer were seemingly marching down the road to even greater wealth, fame and happiness when out of the bushes an attacker emerged. In James Packer’s case, he was his own assailant. Last week, he suddenly resigned from his company, Crown Casinos, and checked into McLean psychiatric hospital in Boston, citing mental issues. Packer has always been a very high profile person. He dated and married gorgeous models and last year was keeping company with Mariah Carey. He is famously rich. In 2006 he was the richest person in Australia, but has fallen to ninth in 2018. James did not build his wealth, Kerry Packer his father did. Kerry Packer was an internationally known high rolling gambler. He was said to have won and lost as much as $30 million on a single trip to Las Vegas. James always lived in his father’s shadow, including tagging along on some of those famous gambling trips. James wanted to be like his father, he wanted to beat Las Vegas. However, he used a different strategy, buying or building a resort on the Strip.
Twice James Packer and his company invested heavily in Las Vegas. Neither project came to fruition and his Vegas losses dwarf those of his father. And lately, problems have developed elsewhere. Crown was doing very well in a joint venture in Macau, but then got caught illegally recruiting gamblers in Mainland China. In Australia, Crown had a grandiose plan to reinvest in the company’s properties and expand into other forms of gaming. Without James to push the projects it is anyone’s guess about Crown’s future in Australia. Packer’s ups and downs, friendships with the political and entertainment elite of the world and his relationships are far too complicated to cover here, but he has been a very busy boy for all of his 50 years. The question now becomes what happens to Crown Casinos, his private investment company and the rest of his life. But a bigger question might be, who will James Packer become now?
The story of Steve Wynn is just as dramatic and from the standpoint of industry observers, much more amazing. No one would have believed on January 1st that within three months, Steve Wynn would be gone. In January the stock was over $200 a share and on the 22nd of January when Wynn Resorts reported, its net revenues of $1.69 billion were up by 29.9%. Steve was clearly on a roll, the kind of thing he had been doing over and over again since the late 1970s when he became an industry phenomenon, a wunderkind. In a month, Steve’s world had started to unwind. The Wall Street Journal published an article that claimed dozens of women accused Wynn of sexual misconduct. A few years ago, the article might have cause a blip in the stock price, but not much more. However in the aftermath of the Harvey Weinstein scandal and the ever-growing me two movement, the article set off a chain of events that ended his career with Wynn Resorts. Within a week of the publication of the article, the stock had dropped from $200.60 per share to $163.22. Wynn first resigned from his position with the national Republican Party, and then from the company. In March, in a series of trades, Wynn sold all of his stock in Wynn Resorts to Galaxy Gaming, a Macau company.
Nothing in my many years of following events in the world of casinos compares to the end of Steve Wynn at Wynn Resorts, the third public company he founded. Its casinos in Las Vegas and Macau were just the latest version of Wynn’s long line of successful visions for the best of all casino-resorts. He has spent over 40 years creating casinos unlike those of other people. If Wynn were fifty years old, like James Packer, maybe he could start again. Assuming of course, he gets out of the legal and regulatory mire of the accusations against him. But Wynn is seventy-six years old and a come-back seems highly unlikely. However, Steve Wynn has been able to pull the rabbit out of the hat more often than anyone else in the industry and until his funeral I would not bet against him. Still, the legal and regulatory challenges are huge, possibly insurmountable.
James Packer and Steve Wynn must each feel as if his equilibrium had been punctuated; as if they had been slugged in the side of the head with a baseball bat. Their departure will alter the industry. Maybe not as much as it will change their lives, but still it will be changed. Steve’s vision will be missed, but his behavior will not be. Sexual harassment is going to become a regulatory issue and it will force the casino culture to adapt to the new standards of acceptable behavior. I do not pretend to celebrate the loss of the Steve Wynn’s genius, but I do think the industry needs to update its culture and behavior. And with the new stock holders and examinations by regulators in Massachusetts, Macau and Nevada, the changes in Wynn Resorts are also far from over. More than one person and corporation has been slapped alongside the head and pushed down a new path lately.
