What’s next for the Wynn casino empire?
President moves into CEO slot
As the chief architect of modern Las Vegas, and a visionary who did not understand the meaning of subdued, Steve Wynn spent more than three decades luring visitors to the Strip with his opulent hotels, fantasy-filled casinos, fine dining experiences and luxe shopping.
But now, the question on everyone’s mind is: What is the $18 billion Wynn Resorts casino and hotel empire without Steve Wynn?
Hours after an unscheduled meeting of Wynn Resorts’ board of directors on Tuesday, Wynn, a 76-year-old billionaire, suddenly resigned as the chairman and chief executive of a casino conglomerate that stretches from Las Vegas to Boston to Macau.
With pressure mounting on his lucrative business operations, including a half-finished $2.4 billion casino resort near Boston, and with shareholder lawsuits and various investigations clouding his future, Steve Wynn said he was stepping down because of “an avalanche of negative publicity.”
“Elvis has left the building,” the global investment firm Jefferies wrote in a note on Wednesday. “Mr Wynn’s value to the company is unarguably profound as its chief visionary and diplomat. As such, we do not believe the company can grow at the same trajectory nor can it maintain its cutting edge position.”
Wynn’s hold on his company had been tenuous ever since The Wall Street Journal published an in-depth investigation last month revealing that he had been accused of harassing female employees for decades, including allegations that he exposed himself and pressured some women to have sex.
He denied the allegations, calling them “preposterous.” And in his statement Tuesday evening, Wynn did not admit to any wrongdoing. A Wynn Resorts spokesman said Wynn was not available for comment on Wednesday.
The fallout for Wynn and his empire has been swift since the allegations were disclosed. His standing as a power player in political circles took an early hit as he quickly resigned as finance chairman of the Republican National Committee. His name was stripped from buildings and programmes at various universities.
The harassment allegations have resulted in multiple shareholder lawsuits and at least four separate investigations into Wynn and the Wynn Resorts operations. One investigation, by Massachusetts gambling regulators, raised worries that it could threaten the license of the Boston resort.
On Wednesday, shares in Wynn Resorts rebounded by jumping 8.6%, as Wall Street investors hoped that Wynn’s surprise departure would stave off any significant licensing or regulatory fallout.
But Wednesday afternoon, members of the Massachusetts Gaming Commission said it would not halt its investigation of Wynn and his company, noting that he continued to hold stock and could exert influence over the company and its brand.
The commission is determining the suitability of Wynn and his partners to hold the lone licence awarded to build a casino in eastern Massachusetts. The luxury resort is on track to open in June 2019.
“A central question is, what did the board of directors and staff know, and when did they know it, about the settlement and the associated allegations?” said David Crosby, chairman of the commission.
He was referring to a settlement reported by the Journal in which Wynn allegedly paid $7.5 million to a former manicurist.
“That’s a critical point for us and for the public of Massachusetts to know ASAP.”
The scrutiny has extended to Macau, the crown jewel of the Wynn empire. The company operates two brassy casinos in the former Portuguese colony, and their revenue is more than eight times that of its casinos in Las Vegas.
But Linda Chen, the president of Wynn’s Macau business, met recently with local government representatives who requested “detailed clarifications” of continuing investigations into Wynn, according to a statement issued on Wednesday from Macau’s Gaming Inspection and Coordination Bureau. The meeting included Lionel Leong, the secretary of economy and finance and Macau’s third-highest-ranking official.
Wynn Macau’s licence to operate in the region expires in 2022.
While the various investigations continue, it is unclear how Wynn Resorts will proceed without its longtime leader.
Matt Maddox, the company’s president since 2013, was named Wynn’s replacement. He joined the company in 2002 after working in corporate finance for what is now Caesars Entertainment.
Billy Vassiliadis, chief executive of R&R Partners, the firm that markets Las Vegas for the city’s Convention and Visitors Authority, said Wynn was “an idea generator.”
“None of us in this world are irreplaceable,” he said. “But that kind of raw imagination is pretty rare.”
Vassiliadis, whose firm is famous for the What Happens Here Stays Here campaign, believes the Wynn brand can succeed even without its namesake.
“The product they have stands apart from the man, and the Wynn brand stands for luxury and service,” he said.