Wynn Resorts said Tuesday it will pay the $35 million fine levied against the company by the Massachusetts Gaming Commission earlier this month but said in a statement that it did not agree with penalties assessed against company CEO Matt Maddox.
However, the Las Vegas-based company – which plans to open the $2.6 billion Encore Boston Harbor next month – said an appeal would “delay the final conclusion of this matter” and the casino operator would pay both its fine and the $500,000 fine assessed against Maddox.
The Wynn board “disagreed” with several of the commission’s “comments and conclusions regarding Matt, and believes they are not supported by the evidence.” The company would have supported Maddox if he decided “to exercise his rights and appeal” the $500,000 fine.
“We appreciate Matt’s decision to forego an appeal in order to allow closure for the company,” Wynn Resorts said in a statement. “The company will pay the fine imposed on him and has today delivered payment of that, and the company’s fine, to the commission.”
Wynn said it plans to open the 671-room Encore Boston Harbor on June 23.
Following a year-long investigation and three days of hearings, the Massachusetts Gaming Commission fined the company and placed several conditions on its license for the Encore project. Regulators had serious questions about Wynn’s suitability after investigators determined the company repeatedly ignored employees’ accusations of rape, sexual harassment and other misconduct against founder and then-CEO Steve Wynn.
Wynn resigned from the company in February 2018 days after the Wall Street Journal first reported the allegations.
Analysts, earlier this month, expressed surprise at the amount of the fine, but expected the company would pay the penalties in order to open Encore Boston Harbor on time.
On Wynn’s quarterly earnings call this month, Maddox alluded to the company not contesting the fine.
“There was no impact on the suitability of the company or its key employees to hold a gaming license in the state,” he said during prepared remarks. “(The investigation) consumed a great deal of resources, at both the company and with the regulators. We feel very confident that it will be the nicest integrated resort on the east coast.”
Wynn Resorts has incurred $2.26 billion in total project costs for Encore Boston Harbor.
In the statement, Wynn Resorts said the company’s board, “appreciates the findings by the Massachusetts Gaming Commission that it, and its qualifiers, remain suitable by clear and convincing evidence.”
However, the board does not agree with the commission’s conclusion that Maddox violated company policy.
“(We) are pleased that neither the commission’s Investigation and Enforcement Bureau, nor the special committee of the board, found that (Maddox), or any other current company executives, violated any company policies in managing the allegations against the company’s founder,” the statement read.
The Wynn board cited an April statement from Nevada gaming regulators that re-affirmed Maddox’s standing in Nevada.
“We believe Matt’s leadership has been, and will continue to be, essential in our transformation from a founder-led company to an innovative global corporation,” the statement read. “Matt has created a more diverse, inclusive and respectful workplace culture – all while maintaining focus on executing the company’s business plan.”
The biggest change has been in Wynn’s board. Longtime Harrah’s Entertainment Chairman and CEO Phil Satre became Wynn’s chairman in August. In April 2018, the company added three women to its board – former White House press secretary Dee Dee Myers, three-time CEO Betsy Atkins, and Kestrel Advisors CEO Winifred “Wendy” Webb – who joined long-standing board member Pat Mulroy, making Wynn among the top 40 S&P 500 companies for female board representation.
Shares of Wynn declined 9 cents or 0.08 percent on the Nasdaq Tuesday to close at $114.11.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
