By Colin A. Young
STATE HOUSE NEWS SERVICE
Acknowledging it as an unusual step, the Massachusetts Gaming Commission agreed Thursday to publicly consider the request of Wynn Resorts to remove embattled former chief executive Steve Wynn from its Massachusetts casino license.
The commission plans to hold a public meeting in about three weeks to hear from Wynn’s personal attorney and lawyers for Wynn Resorts, who have argued that Wynn should not still be classified as a “qualifier” who must meet state suitability standards since the casino mogul has resigned his positions with the company and divested his stocks.
People determined to be qualifiers must pass a background check and be judged by the commission to meet suitability standards to hold a Massachusetts casino license and control a gambling operation in the state.
After the Wall Street Journal in January detailed an alleged “decades-long pattern of sexual misconduct” by Wynn, including claims he had pressured employees to perform sex acts, the Gaming Commission has been investigating whether Wynn and others involved in the company would still meet the strict suitability standards outlined in the state’s gaming law.
Gaming Commission Executive Director Edward Bedrosian said the commission’s hearing will be limited to considering “the legal question as to whether Steve Wynn is a qualifier under Chapter 23K and the commission’s regulations” but that the commission’s ongoing investigation into Wynn and Wynn Resorts will continue unaffected no matter the determination at the upcoming hearing.
“The commission’s decision at the hearing will not end the current investigation by the Investigations and Enforcement Bureau as to allegations of misconduct against Steve Wynn or the handling of those allegations by Wynn Resorts and its officers or directors,” he said.
Previously, the head of the commission’s investigations bureau confirmed that Steve Wynn paid a private $7.5 million settlement to a manicurist to resolve a sexual harassment allegation, which was not previously disclosed when Wynn Resorts sought a casino license. Asked in February whether certain other executives had any knowledge of the settlement, Bedrosian said he could not answer because “that would certainly seem to be part of the ongoing investigation.”
Commission Chairman Stephen Crosby reiterated Bedrosian’s point Thursday when asked if the investigation would shift its focus to the officers who remain at Wynn Resorts and what they may have known about the allegations against Wynn when they sought a license for a resort casino in Everett if Wynn is no longer considered a qualifier.
“The investigation will continue as it has been going and we’ve always been clear that there are the Steve Wynn personal issues and then there are the other issues of the organization, the board of directors and other senior managers,” Crosby said. “That investigation will continue as it always has.”
In a letter to the commission last month, Wynn’s personal attorney Brian Kelly at Nixon Peabody wrote that the casino mogul had resigned as CEO and chairman of Wynn Resorts on Feb. 6 and that he has since divested himself of all control and ownership of Wynn Resorts.
“As Mr. Wynn is no longer a qualifier of any Commission licensee, there is no longer any regulatory or statutory justification to continue the Commission’s inquiry into Mr. Wynn’s suitability as a qualifier of the Commission,” Kelly wrote. “The Commission no longer has jurisdiction over Mr. Wynn — he is a private Nevada citizen unaffiliated with Wynn Resorts, LLC or any Commission licensee.”
Kelly said that as of March 27, Wynn would no longer respond to any of the commission’s requests for information in connection with its investigation. He also provided the commission with documentation of Wynn’s sale of his stocks in Wynn Resorts.
But Crosby said Thursday that the hearing the commission holds to determine if Wynn is a qualifier will be more thorough than simply checking the evidence that Wynn has actually resigned and divested himself.
“It’s not just checking boxes — did he sell his stock, does he have a position — it also goes to does he have any residual influence, for example,” he said. “Yes, we will be asking some questions and making sure that we understand for sure and in detail exactly what the relationship is.”
Bedrosian said that it is a common practice of gaming regulators around the country to remove retired or resigned executives from the list of qualifiers, but Crosby acknowledged that the situation involving Wynn is unique because he was the company’s entire brand, not merely an executive or employee.
“This is not just a routine change of a significant player, this is the change of a very significant player,” he said.
Crosby added, “If it was just any old board seat or any old mid-level manager, no we would probably not hold a public hearing. But anybody who was a really particularly significant player, especially in a situation like this that has been so controversial and visible and dramatic, we just want to make sure the public knows absolutely everything we’re thinking about and how and why we’re doing what we’re doing.”
Bedrosian said he and the commission’s staff will work with Wynn’s attorneys to schedule the hearing, but suggested that the first possible date would be during the first week of May. The hearing will include presentations from the commission staff, Wynn’s personal lawyer and attorneys representing his former gambling empire. The commission is not expected to invite testimony from the public.
Gov. Charlie Baker on Thursday emphasized that removing Wynn’s name from the casino license is not his decision, but one that will and should be made by the Gaming Commission.
“He’s no longer a stockholder, he’s no longer chairman of the board, he’s no longer involved in the company, I would think removing his name from the license would make sense,” Baker said.
On Thursday afternoon, the Wall Street Journal reported that Wynn Resorts is in the early stages of talks to sell the resort casino it is building in Everett to MGM Resorts International. The WSJ cited “people familiar with the matter” who said that the gambling companies were discussing a transaction that would only include the planned Wynn Boston Harbor project, not the entire Wynn Resorts company as had previously been reported.
[Matt Murphy contributed to this report]