The Wall Street Journal reported that, without informing his board, Mr Wynn paid a $7.5m settlement to a manicurist who told others that Mr Wynn forced her to have sex at his Wynn Las Vegas casino in 2005, and whose supervisor had reported the incident to human resources. The newspaper reported allegations that Mr Wynn exposed himself to massage therapists and other women and made unwanted advances. According to the newspaper, women would hide in lavatories when Mr Wynn was said to be on his way to a salon where they worked. Mr Wynn, in a written statement, said, “The idea that I ever assaulted any woman is preposterous.” He also 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 $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.
If Mr Wynn steps aside, the firm would become vulnerable. Competitors are sizing up its assets. “Everybody’s moving quickly,” says an executive close to one of Wynn Resorts’ rivals. Suitors include Caesars Entertainment; Blackstone, a private-equity group with a casino in Las Vegas; and MGM Resorts International, which already owns the Mirage and Bellagio, having swallowed up Mr Wynn’s previous casino company, Mirage Resorts, in a hostile takeover 18 years ago. The prospect of yet another forced sale is a remarkable turnaround in fortunes. Analysts from JPMorgan Chase, in a note following the news of the allegations, said that Wynn Resorts has long had “the single largest individual CEO dependency” of any gaming company the investment bank covers, and that investors have rewarded the firm with a premium. But a big bet on one boss carries risks.
