Even in a business where the house always wins, Steve Wynn is used to winning more than anyone else. The casinos that the billionaire has built, from The Mirage and Bellagio to Wynn Macau and Wynn Palace, helped transform Las Vegas and Macau from seedy gambling joints into luxury high-roller destinations. His fiercest rivals heaped praise on him as a visionary and perfectionist. His company, Wynn Resorts, enjoyed a “Wynn premium” from analysts and investors.
Now he could lose control of his empire. On January 26th the Wall Street Journal published an investigation detailing numerous allegations that would amount to a decades-long pattern of sexual misconduct by Mr Wynn. The board of Wynn Resorts has announced an inquiry by a special committee into the reports, the veracity of which Mr Wynn denies.
Mr Wynn has resigned as finance chairman of the Republican National Committee. Gaming commissioners in Nevada, Macau and Massachusetts are conducting their own inquiries. He could yet be pushed to step down as chairman and chief executive of the firm he founded, in which he holds a 12% stake. The market value of Wynn Resorts, which had more than doubled in just under a year to US$20bn, has fallen by 15% since the report.
He accused his ex-wife, Elaine Wynn, of instigating the allegations as part of a long-running legal battle, which she has denied.
Mr Wynn is the first boss of a big public company to face sexual misconduct accusations in the #MeToo era. As with Harvey Weinstein and The Weinstein Company, Mr Wynn’s control over Wynn Resorts is viewed as near-absolute.
His signature is the company’s logo. Depending on the outcome of the firm’s inquiry, its board and senior executives may come under intense scrutiny from both investors and regulators over whether they failed to hold the boss to account.
His empire-building may come to a halt before then. Regulators in three jurisdictions are considering the impact on the company’s fitness to hold casino licences. Mr Wynn has a new project under construction in Las Vegas, is planning an expansion in Macau and is building a casino in Massachusetts. The $2.4bn Wynn Boston Harbour, scheduled to open next year, is projected to be hugely profitable since it would have an effective local monopoly. But the greatest financial exposure for Wynn Resorts is in Macau, an autonomous region of China, where its two casinos provided 75% of the company’s US$1.7bn of earnings before interest, taxes, depreciation and amortisation last year. The company holds a concession from the Macau government that is up for renewal in 2022.
Sources: Wall Street Journal, Economist, South China Daily