Los Angeles: He was the undisputed King of Las Vegas. His signature graced the side of the city’s fanciest casino and his gravelly voice greeted callers to the hotel. But now Wynn Resorts Ltd will have to get used to life without Steve Wynn as chief executive officer (CEO).
The 76-year-old casino mogul, caught amid a deluge of sexual harassment allegations, stepped down on Tuesday night as chairman and chief executive officer of the company he founded, which operates opulent resorts in Las Vegas and Macau and is building another near Boston.
The billionaire joins the list of powerful men who have been toppled by the allegations of sexual misconduct sweeping America’s boardrooms. Just over a week ago, Wynn was in many ways the face of the US casino business after dominating it for five decades. But after a swift and crushing downfall, he’s now being mentioned in the same breath as disgraced Hollywood mogul Harvey Weinstein and has been forced to step down as the Republican National Committee’s finance chair. What’s more, his company has lost nearly a fifth of its market value in that time.
Though the board of the Las Vegas-based firm elevated its 42-year-old president, Matthew Maddox, to the CEO spot, many questions remain. At the top of the list is whether regulators from Macau to Massachusetts will still pursue investigations into the company and the harassment allegations against Wynn. The fate of the two new hotels he’s proposed for Las Vegas may face scrutiny.
“The skyline of Las Vegas is Steve Wynn," said William Thompson, a professor emeritus of public administration at the University of Nevada, Las Vegas, and a longtime observer of the casino business.
Indeed in his hometown, Wynn is credited with taking the city’s casinos from the era of gin joints and saloons into modern luxury resorts, with suites and art galleries and high-end dining. Among his most famous properties are the Bellagio, with its musical-fountain show, and the Mirage, with its streetside volcano and resident Cirque du Soleil show. Both properties are now owned by MGM Resorts International.
The seeds of Wynn’s downfall began when his ex-wife, Elaine Wynn, in 2016 revealed in legal proceedings that he had secretly paid a multi-million dollar settlement to a female employee of the company in 2005.
Then on 26 January, the Wall Street Journal reported that the payment involved allegations that the executive had forced himself upon a company manicurist and that the incident fit a pattern of Wynn pressuring employees to have sex with him. Wynn has denied any wrongdoing, but he resigned the following day from his post as finance chair of the Republican National Committee. Regulators in Nevada, Massachusetts and Macau began probing the allegations.
On Monday, the Las Vegas Review-Journal reported details of a 1998 lawsuit by cocktail waitresses at Wynn’s previous company, Mirage Resorts. The newspaper spoke to one former server who said she felt Wynn forced her to have sex with her to keep her job. Wynn declined to comment on the report on Monday, but by Tuesday the drumbeat was too much for him.
“I have reached the conclusion I cannot continue to be effective in my current roles," Wynn said in a statement, announcing his resignation as chairman and chief executive. The executive also stepped down from the board of the company and as chairman of Wynn Macau Ltd, a publicly-traded subsidiary.
Wynn’s resignation may not be enough to satisfy regulators in Macau, according to Wang Changbin, director of the Gaming Teaching & Research Center at Macao Polytechnic Institute, since the gaming law’s suitability clause applies to major shareholders as well as executives and directors.
“If Steve Wynn is considered not suitable, according to the law he should give up his shares," Wang said. The Macau government is likely to watch for developments in the US, he said.
Elaine Wynn, his ex-wife, declined to comment on where the resignation left her and her now six-year-old lawsuit to win back control of the 9% stake in Wynn Resorts which she had signed over to him. That case is expected to go to trial in April.
The fall of Wynn could make his company a takeover target for another casino operator like Caesars Entertainment Corp., which has long coveted a casino in Boston and Macau. It could also draw interest from a private equity investor, who could leverage the company’s considerable cash flow, or from an Asian leisure company looking to grab a piece of the world’s largest gambling market, Macau.
While he’ll no longer run the company, Wynn remains in control of about 21% of Wynn Resorts through his own holdings and the stake held by Elaine Wynn. That means he’ll remain the single most influential shareholder at Wynn, and regulators will still have cause to examine his behaviour. The stake isn’t big enough to fend off a takeover or other major corporate changes if a majority of shareholders support them.
His departure certainly creates a lot of work for Maddox, who joined Wynn Resorts in 2002 and worked his way up to becoming president in 2013. He was seen as Wynn’s right-hand man, often at the casino magnate’s side at public events. In his 16-year career at Wynn, Maddox served as chief financial officer, and held a range of management roles at Wynn Macau. Maddox worked at Caesars Entertainment and as an investment banker before joining Wynn.
“With Matt, Wynn Resorts is in good hands," Wynn said. Bloomberg