Wynn Resorts fined $35M for misconduct allegations response

BOSTON — Gambling regulators in Massachusetts on Tuesday levied a $35 million fine on Wynn Resorts but allowed the company to keep its casino license after executives failed to disclose allegations of sexual misconduct against company founder Steve Wynn.

The Massachusetts Gaming Commission also fined CEO Matthew Maddox $500,000 for his “clear failure” to require an investigation of at least one misconduct complaint he’d been aware of. It also required the Nevada company, which also owns properties in Las Vegas and Macau, to be subject to review by an independent firm selected by the state as a condition of maintaining its license.

Wynn Resorts and lawyers for Steve Wynn didn’t respond to emails seeking comment on the late evening decision, which effectively clears the way for the opening of the company’s $2.6 billion Encore Boston Harbor resort in June.

The long-awaited decision comes after the commission this month released a more than 200-page investigative report, held three days of public hearings and deliberated for nearly four weeks on what company officials knew and did about the allegations.

Steve Wynn has denied the claims, saying his relationships with female employees, many of them spa workers and cocktail waitresses, had been consensual. He resigned as CEO last year after the Wall Street Journal first reported on the allegations.

Nevada regulators, after an investigation similar to Massachusetts’ earlier this year, levied a $20 million fine on the company but also allowed it to retain its casino license.

Regulators in both states were focused on how long company officials were aware of the allegations and how they responded, rather than the truth behind the claims.

In Massachusetts, gambling investigators found company officials were aware of many of the allegations but failed to report them to internal investigators or take other steps mandated in the company’s sexual harassment policies.

They also found Wynn officials failed to disclose to regulators settlements paid out to Steve Wynn’s accusers during their initial application for a casino license. Among them was $7.5 million Steve Wynn personally paid in 2005 to a former salon employee who alleged she’d become pregnant after Wynn raped her.

Massachusetts regulators also found Wynn executives were aware but didn’t disclose at least three other complaints casino massage therapists brought against Steve Wynn as the company was being vetted by the state from 2013 to 2014.

Wynn Resorts officials argue the company has fundamentally changed since the scandal.

Every top executive that actively covered up or failed to act on the allegations has been fired. The board of directors saw an infusion of new members, including three women, and new sexual misconduct policies have been instituted, such as the creation of an oversight panel to review sexual harassment claims led by a former Boston police commissioner.

But Gaming Commission members, during their April hearings, directed pointed questions at Maddox, who has been with the company since its founding and is a close ally of Steve Wynn.

Commission members criticized Maddox for authorizing spying on employees named in the Wall Street Journal’s story, but not actually investigating the sexual misconduct claims. And, when asked by commission members to name at least one of the company’s new sexual harassment policies, Maddox wasn’t able to.

Maddox acknowledged he should have informed regulators about the allegations in 2018 because he and other company officials were aware of The Wall Street Journal’s reporting weeks prior to publication.

He also testified he’d been aware of a 2008 settlement as the company’s then-chief financial officer, but maintained he was told the payment was to help a financially struggling employee.

And Maddox told regulators he was also aware of one of a number of complaints made by spa workers at Wynn Las Vegas about Steve Wynn’s conduct during massages. As company president at the time, he said he told the then-president of the casino to tell Steve Wynn to discontinue the behaviour.

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