Claiming shock and indignation, the Nevada Gaming Commission unanimously voted to levy the largest fine in state history — $20 million — against Wynn Resorts, for the sexual misconduct of its founder Steve Wynn, and the behavior of executives who covered it up.
Like parents on the hook for an absentee, wayward child, board members and executives of Wynn Resorts sat stoically as Commissioners meted out their punishment.
Wynn Resorts previously agreed to accept the facts included in the state’s complaint, which details close to a dozen years of findings against Wynn, including non-consensual sex and sexual harassment. The complaint also identified the executives who were aware of the acts detailed in the complaint but failed to take action: former President and CEO Marc Schorr, former Vice-President of Hotel Operations Doreen Whennen, former Vice-President and Chief Human Resources Officer Arte Nathan and legal counsel Kim Sinatra.
“It’s pretty tremendous those facts would be admitted to,” said Commissioner John Moran Jr., adding the company’s stipulation to the facts gave him a “comfort level” of evidence available to support the allegations.
Wynn Resorts Chief Executive Officer Matt Maddox appealed to the commissioners on behalf of the company’s 25,000 employees.
“Roughly a year ago today, our company was shaken to its core. The 25,000 people were shaken,” Maddox said. “The media was reporting last year at this time that Wynn was for sale. Private equity investors were writing up offers to break up the company. People were scared.”
“Good friends of mine lost their jobs,” Maddox said of those implicated in the cover up of Wynn’s acts.
New Wynn Resorts board member Phil Satre, a veteran of the gaming industry, assured the commission the cronyism that enabled Steve Wynn is no longer a factor.
“There’s no long-standing relationships, any of those things.” said Satre, who sits on the company’s compliance board. “We are independent. We are here to monitor,”
“There are no winners here today. Just losers on both sides,” said Gaming Commission chairman Tony Alamo. “The State of Nevada lost. We’re the gold standard. This happened in our state. The Wynn Corp was the face and pride of gaming in the State of Nevada. The shareholders lost over half their value. I’m sure there were shareholders who had this in their retirement portfolios.”
The company’s stock did not fall by half. It did however lose about a quarter of its value.
“The Wynn Corporation was going to build a hotel across the street. That’s on hold. They were going to build a gorgeous water park in the back. That’s on hold. Jobs were lost. Vendors suffer. Imagine all the taxes we don’t collect. The healing has to start,” Alamo said, inventorying the damages.
“Quite frankly, the kind of conduct, the things in there, are very disgusting to me personally, in terms of the allegations as well as the facts admitted to in the settlement before us,” said Moran. “It shows a pattern of conduct that affects the gaming industry, but more importantly, affects the thousands and thousands of employees, men and women who go to work, and may have to go to a place that in fact we see has the problems that existed as enunciated in the complaint. It’s not good.”
“In the last three decades there’s been twelve fines over $1 million, and two of us present, Mr. Moran and I, when we approved the highest fine at the time — $5.5 million,” Alamo said, as he tallied the fine.
The chairman suggested a $20 million penalty, which was unanimously approved by the Commission.
Stone-faced and silent, executives and board members for Wynn Resorts refused to comment as they left the hearing and boarded three waiting black SUVs emblazoned with the Wynn logo.
The company later issued a statement announcing the end of the regulatory process.
“We are pleased that the Nevada Gaming Commission has recognized the company’s transformation and ‘refreshed culture’ over the course of the last twelve months and acknowledged the ‘paradigm shift’ that has occurred within the company.
“The completion of the review by Nevada regulators is an important step forward, and we deeply appreciate the trust and confidence they have placed in the new leadership of Wynn Resorts to ‘grow and prosper’.”
Wynn Resorts was represented at the hearing by Greg Brower, a former U.S. Attorney for Nevada. In 2017, the U.S. Equal Employment Opportunity Commission found Brower subjected a female prosecutor to sex discrimination and retaliation. Brower was required to attend anti-sex discrimination and retaliation training and the Justice Department had to pay $287,998 to the former prosecutor who complained that Brower, while in charge of the office from 2008 to 2009, was hostile to her after she complained that he made a sexist remark.
Charges against Wynn reported by the Wall Street Journal, which spurred the investigation by Nevada gaming regulators, and elsewhere extend decades into the past.
In the late 1990s, eleven cocktail waitresses filed suit against Mirage Resorts, alleging Wynn told them to lose weight or they’d lose their positions and be transferred to other jobs. The resort entered into confidential settlements with the plaintiffs, who say the discovery process of the litigation threatened to further expose Wynn.
Wynn Resorts reported revenues of $6.7 billion in 2018.