Wynn quits amid harassment claims, ending era of casino legend

Wynn in 1993

He was the undisputed King of Las Vegas. His signature graced the side of the city’s fanciest casino and his gravelly voice greeted callers to the hotel. But now Wynn Resorts Ltd. will have to get used to life without Steve Wynn as CEO.

The 76-year-old casino mogul, caught amid a deluge of sexual harassment allegations, stepped down yesterday [Macau time] as chairman and chief executive officer of the company he founded, which operates opulent resorts in Las Vegas and Macau and is building another near Boston.

In announcing Wynn’s resignation, the company’s board of directors made clear it had done so “reluctantly.” “It is with a collective heavy heart, that the board of directors of Wynn Resorts today accepted the resignation of our founder, CEO and friend Steve Wynn,” said Boone Wayson, who was named non-executive chairman of the board. Matthew Maddox, the company’s president since 2013, was named CEO effective immediately. He is aged 42.

Steve Wynn joins the list of powerful men who have been toppled by the allegations of sexual misconduct sweeping America’s boardrooms. Just over a week ago, Wynn was in many ways the face of the U.S. casino business after dominating it for five decades. But after a swift and crushing downfall, he’s now being mentioned in the same breath as disgraced Hollywood mogul Harvey Weinstein and has been forced to step down as the Republican National Committee’s finance chair. What’s more, his company has lost nearly a fifth of its market value in that time.

The stock regained some of the lost ground yesterday, rallying as much as 8.8 percent in New York trading. Meanwhile, analysts disagreed about whether the departure of the gambling titan would help or hurt the company. JPMorgan Chase & Co. upgraded its rating on the stock, while Roth Capital’s David Bain slashed his recommendation, saying that the “Steve Wynn valuation premium” will take years to recoup. The resignation “removes a visionary, not an overhang,” Bain wrote in a note.

Though a new CEO was swiftly named, many questions remain. At the top of the list is whether regulators from Macau to Massachusetts will still pursue investigations into the company and the harassment allegations against Wynn. The fate of the two new hotels he’s proposed for Las Vegas may face scrutiny.

“The skyline of Las Vegas is Steve Wynn,” said William Thompson, a professor emeritus of public administration at the University of Nevada, Las Vegas, and a longtime observer of the casino business.

Indeed in his hometown, Wynn is credited with taking the city’s casinos from the era of gin joints and saloons into modern luxury resorts, with suites and art galleries and high-end dining. Among his most famous properties are the Bellagio, with its musical-fountain show, and the Mirage, with its street side volcano and resident Cirque du Soleil show. Both properties are now owned by MGM Resorts International.

The seeds of Wynn’s downfall began when his ex-wife, Elaine Wynn, in 2016 revealed in legal proceedings that he had secretly paid a multi-million dollar settlement to a female employee of the company in 2005.

Then on Jan. 26, the Wall Street Journal reported that the payment involved allegations that the executive had forced himself upon a company manicurist and that the incident fit a pattern of Wynn pressuring employees to have sex with him. Wynn has denied any wrongdoing, but he resigned the following day from his post as finance chair of the Republican National Committee. Regulators in Nevada, Massachusetts and Macau began probing the allegations.

On Monday, the Las Vegas Review-Journal reported details of a 1998 lawsuit by cocktail waitresses at Wynn’s previous company, Mirage Resorts. The newspaper spoke to one former server who said she felt Wynn forced her to have sex with her to keep her job. Wynn declined to comment on the report Monday, but by Tuesday the drumbeat was too much for him.

“In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity,” Wynn said in a statement, announcing his resignation as chairman and chief executive. “As I have reflected upon the environment this has created — one in which a rush to judgment takes precedence over everything else, including the facts — I have reached the conclusion I cannot continue to be effective in my current roles.”

Wynn’s resignation may not be enough to satisfy regulators in Macau, according to Wang Changbin, director of the Gaming Teaching & Research Center at Macao Polytechnic Institute, since the gaming law’s suitability clause applies to major shareholders as well as executives and directors.

“If Steve Wynn is considered not suitable, according to the law he should give up his shares,” Wang said. The Macau government is likely to watch for developments in the U.S., he said.

Elaine Wynn, his ex-wife, declined to comment on where the resignation left her and her now six-year-old lawsuit to win back control of the 9 percent stake in Wynn Resorts which she had signed over to him. That case is expected to go to trial in April.

The fall of Wynn could make his company a takeover target for another casino operator like Caesars Entertainment Corp., which has long coveted a casino in Boston and Macau. It could also draw interest from a private-equity investor, who could leverage the company’s considerable cash flow, or from an Asian leisure company looking to grab a piece of the world’s largest gambling market, Macau.

While he’ll no longer run the company, Wynn remains in control of about 21 percent of Wynn Resorts through his own holdings and the stake held by Elaine Wynn. That means he’ll remain the single most influential shareholder at Wynn, and regulators will still have cause to examine his behavior. The stake isn’t big enough to fend off a takeover or other major corporate changes if a majority of shareholders support them.

His departure certainly creates a lot of work for Maddox, who joined Wynn Resorts in 2002 and worked his way up to becoming president in 2013.

He was seen as Wynn’s right-
hand man, often at the casino magnate’s side at public events. In his 16-year career at Wynn, Maddox served as chief financial officer, and held a range of management roles at Wynn Macau. Maddox worked at Caesars Entertainment and as an investment banker before joining Wynn.

“With Matt, Wynn Resorts is in good hands,” Wynn said. MDT/Agencies