Wynn has won a victory of sorts in the United States after settling a case in Massachusetts without losing its gaming licence. The $35 million fine wasn’t exactly a win, but it was a bit of a relief. Wynn Resorts losing its gaming licence would have reduced its buying power and value around the world.
Mistakes in Massachusetts
A small state on the East Coast of the US called Massachusetts finally closed its case on Wynn Resorts.
The investigation took approximately one year. However, the entire situation began in 2015. That’s when Wynn bought 33 acres of land in Everett, Massachusetts to build a casino/resort. The Massachusetts Gaming Commission agreed to the $1.7 billion casino project and approved the Wynn Resorts gaming licence, all with the goal of opening the resort in 2018.
Various lawsuits regarding the Wynn Boston Harbor project delayed its construction, but it finally did start in March 2016.
In 2018, however, Wynn Resorts owner Steve Wynn had explosive allegations made against him. Numerous sexual misconduct and rape allegations eventually forced Wynn out of the company. Meanwhile, the Massachusetts Gaming Commission opened its own investigation into the company. Its aim was to decide whether it would keep its gaming licence in the state.
As the process moved forward, the company agreed to change the name of the project to Encore Boston Harbor. Thereby, removing the Wynn name.
The commission released its final report in late April 2019. It subsequently assessed a $35 million fine upon Wynn Resorts due to its failure to disclose the allegations against Wynn and the company. CEO Matthew Maddox also received a $500K fine.
The good news is that Wynn has been allowed to retain its gaming licence in Massachusetts and proceed with the casino project. The cost had since risen closer to $2 billion. It was scheduled to proceed toward an opening date of June 23, 2019.
Wynn’s Massachusetts gaming licence was riding on the outcome of the Massachusetts Gaming Commission investigation. Nonetheless, much more was at stake. Losing a state licence would’ve represented a huge financial hit to the company. But it may have prompted other states to take similar actions. Nevada, for instance, had already conducted a similar investigation and fined Wynn Resorts $20 million for the same types of infractions. One licence revocation, however, could’ve led to larger and more expansive problems.
The findings of the commission were not positive. It was “profoundly disturbed” by the “repeated systematic failures and pervasive culture of non-disclosure” surrounding the allegations against Wynn leading up to his eventual departure. The company then received a massive fine for handling the situations so poorly.
Part of the final 54-page report issued by the commission that allows the project to move forward is the inclusion of new conditions on the Wynn Resorts gaming licence. These include but are not limited to an independent monitor assigned to oversee the company’s behaviors, organisation changes to implement a new culture within the company, and its adherence to policies.
Other Wynn Woes Around the World
Nearly one month ago, news emerged that Wynn Resorts was in talks with Australia’s Crown Resorts regarding the possibility of a $10 billion takeover. It was going be one of the largest gambling mergers in recent history. Wynn, however, was unhappy that the news leaked to the public and immediately took the offer off the table.
Some speculated that Crown then anticipated a bidding war. That didn’t come to fruition in the weeks that followed, though. The lack of other bidders coming forward, at least publicly, has led analysts to speculate (again) that Wynn might return to the negotiating table to complete the deal.
The Crown-Wynn situation is in wait-and-see mode for the time being.
Wynn Resorts Gaming Licence Intact
Technically, the Wynn-Crown deal could have been done regardless of the outcome of the Massachusetts investigation. But Wynn Resorts has much more leverage in the deal with its licences intact.
It remains to be seen if Wynn and Crown will resume talks for a potential takeover, now that the dust has settled on numerous fronts. But Wynn might feel confident enough to move forward after the outcome in Massachusetts.