As Tilman Fertitta flew off to Italy Wednesday to serve as its U.S. ambassador, his legal counsel told the Nevada Gaming Control Board that the billionaire entrepreneur is unhappy with Wynn Resorts’ management and the company’s lagging stock price.
It’s the first critical public comment from Fertitta since he passed a 10% threshold this year of owning Wynn stock, requiring Nevada regulators to find him suitable as a shareholder. As a licensed casino operator in the state with his Golden Nugget brand, Fertiitta was unanimously recommended for suitability to the Nevada Gaming Commission.
Fertitta Entertainment General Counsel Steven Scheinthal made the comments about Fertitta’s unhappiness that essentially corroborates a story by Bloomberg in November about Fertitta’s unhappiness with the operation.
Fertitta owns 12.58 million shares of Wynn stock. He increased his stake in the company to 9.9% in
November, up from 6.1% in October 2022.
Scheinthal told the Board that as of Wednesday, Fertitta was still listed with the SEC as a passive investor rather than filing as a SEC 13D that would allow him to have greater influence over the company.
“Mr. Fertitta wanted me to let the Board know that he’s not happy with the stock price or the decisions that have been made by Wynn management,” Scheinthal said. “That said, he’s still a G filer, which means he’s a passive investor.”
Wynn’s stock price closed just above $87 on Wednesday, down from its 52-week high of $107.51. It traded in excess of $137 in March 2021.
Scheinthal said Fertitta was required to step down as CEO of Fertitta Entertainment to take the new role as ambassador. Ethics laws require the person who holds the position to have only one employer, the U.S. government. That required resigning as an officer and director from all of his holdings. With regard to equities he holds, Fertitta had to disgorge all multinational companies that have business dealings in Italy.
“With regard to his holdings in Fertitta Entertainment Inc., they determined there was no conflict in his duties and that he could still be an equity owner,” Scheinthal said. “He can set the direction, tell us the things he would like to see done, but he can’t be involved in the day-to-day operations or take a salary from any of the businesses. He can get a dividend.”
Fertitta’s ex-wife Paige is now serving in his leading role.
Board member George Assad thanked Scheinthal for pointing out Fertitta’s unhappiness with the stock price.
“I was curious about that, because I’ve followed his career and value him tremendously as an expert in the world of business, valuing businesses, and deciding what he wants to own or invest in,” Assad said. “That includes the Houston Rockets. He’s been able to turn that franchise around to become very successful.”
Scheinthal said Fertitta was unhappy with Wynn paying a $130 million forfeiture to the U.S. government over AML-related violations. It was also fined $5.5 million by Nevada gaming regulators. With the federal government, Wynn settled criminal allegations that it conspired with unlicensed money-transmitting businesses worldwide to transfer funds to benefit itself.
“He wasn’t happy with their failure to follow protocol,” Scheinthal said. “He felt like that was a lapse in handling the business.”
Assad said that happened starting in 2014 when Steve Wynn owned the property.
“I’m sure Mr. Fertitta, if he’d owned the property at that time, would have had closer tabs on money-transmitting companies from Macau to the United States to businesses here in Las Vegas,” Assad said.
Scheinthal told Assad that Fertitta was happy with Wynn’s Al Marjan resort project in the United Arab Emirates that’s slated to open in 2027 at a cost of $5.1 billion.
“He sees that as an upside opportunity for the stock price,” Scheinthal said. “We see it as a positive for the company.”
In further questioning, Scheinthal said Fertitta wouldn’t want him to say what the stock price should be, but added that at $86 to $87 a share, “the price should be significantly higher and he’s not happy with decisions that management has made. Those are the two things he wanted me to convey to the Board.”
CDC Gaming reached out to Wynn Resorts during the meeting; Wynn had no response to Fertitta’s comments.
Fertitta did not appear at the hearing or appear via video conference. Scheinthal said he was busy preparing to leave for his ambassadorial post and wasn’t yet in Italy.
Board Chair Kirk Hendrick said they understand Fertitta won’t be involved. He has more than enough to do as ambassador to Italy and San Marino for the next several years.
