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Wynn Resorts mishandled sexual misconduct allegations against founder Steve Wynn, then concealed the accusations from Massachusetts regulators when seeking one of the state's coveted casino licenses, according to a report by investigators for the Massachusetts Gaming Commission.
The 209-page report, made public Tuesday at the start of a three-day hearing to determine whether Wynn Resorts is fit to retain its license, concludes that "over a course of years, a limited group of executives and employees in positions of authority at the Company, including the legal division, were aware of certain allegations of sexual misconduct against Mr. Wynn involving employees, but they disregarded Company policies when it came to handling those allegations.
"The investigation also shows that in some instances, particular Company executives, with the assistance of outside counsel, were part of affirmative efforts to conceal allegations against Mr. Wynn that came to their attention. Their efforts at secrecy made it exceedingly difficult, if not impossible, for gaming regulators to detect potentially derogatory information through typical regulatory means."
The company told gaming commissioners last year that it did not disclose a $7.5 million settlement in one case of alleged sexual misconduct against Wynn on advice of its counsel.
In a statement responding to the report, Wynn Resorts said, "The findings are consistent with the investigation conducted by our own Special Committee of Independent Directors as well as that of the Nevada Gaming Control Board. The Company does not contest the facts contained in the [Investigations and Enforcement Bureau] report."
The company added that "any employee who was aware of allegations of sexual assault against the company's former chairman and did not investigate or report it is no longer with the company."
The commission's decision to sustain or revoke Wynn Resorts' license, which could come days or weeks after the hearing concludes, is high-stakes: Wynn Resorts' $2.6 billion Encore Boston Harbor complex is slated to open in June, and is expected to employ 5,800 people. A determination that Wynn Resorts is unfit to operate the casino could force a sale of Encore or trigger a lawsuit; it also could delay the casino's opening and cast thousands of jobs into uncertainty.
Commission Executive Director Ed Bedrosian said last week that regulators may decide that Wynn Resorts is "suitable," "not suitable" or "suitable with some type of conditions."
The Nevada Gaming Commission recently allowed Wynn Resorts to keep its license in that state but levied a $20 million fine. Investigators for the Nevada commission found that former Wynn Resorts executives failed to address sexual misconduct allegations against Steve Wynn.
Wynn Resorts initially won a hard-fought battle for the lone Greater Boston casino license in 2014. At the time, the company did not tell the Massachusetts Gaming Commission about misconduct allegations against Steve Wynn, according to the report by the commission's Investigations and Enforcement Bureau (IEB).
Investigators did not make a recommendation about the status of Wynn Resorts' license and emphasized that they did not attempt to determine the veracity of misconduct allegations against Steve Wynn. The IEB wrote that "the Commission should evaluate the entirety of the Company's response to the allegations of sexual misconduct in light of the evidence revealed in this investigation and detailed in this report."
Investigators credited Wynn Resorts with "significant changes in leadership, policies, structure, and internal controls" but said those moves "do not erase the fact that the corporate failures revealed in this investigation are significant, repetitive, and reflective of the Company's historical governance practices."
The IEB also hired the Ontario consulting firm HLT Advisory to help determine whether Wynn Resorts remains financially stable.
"HLT Advisory's review and analysis of the potential impact of the allegations of sexual misconduct on the financial stability of the Company indicate that the financial stability remains sufficient for licensure in Massachusetts," investigators wrote.
Regulators began to reexamine Wynn Resorts' fitness to hold the license after a January 2018 report by the Wall Street Journal chronicled a pattern of alleged misconduct by Steve Wynn.
In one case — the one that resulted in the $7.5 million settlement — a manicurist alleged in 2005 that she had become pregnant after Wynn raped her in his Las Vegas office, according to the IEB report. Investigators found that the company never conducted an internal investigation of the allegation.
Wynn denies wrongdoing but ultimately resigned from the company he founded and sold his stake in it. Wynn Resorts has said it cleaned house, removing executives who enabled Steve Wynn's alleged behavior.
As investigators for the Massachusetts Gaming Commission conducted their probe, Steve Wynn sued the commission and his former company, arguing that some documents Wynn Resorts turned over to investigators should be covered by attorney-client privilege. The suit was settled in February.
This segment aired on April 2, 2019.
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