The Wynn Resorts casino project in Everett could be delayed while former owner Steve Wynn tries to block a report about allegations of sexual misconduct.
Casino mogul Steve Wynn's former company was fined a record $20 million by Nevada gambling regulators on Tuesday for failing to investigate claims of sexual misconduct made against him before he resigned a year ago.
The penalty against Wynn Resorts Ltd. ends an investigation that began after The Wall Street Journal reported that several women said the company founder harassed or assaulted them.
Wynn Resorts will keep its gambling license under the Nevada Gaming Commission settlement approved by four commissioners who set the fine.
"It's not about one man," said Commissioner Philip Pro, a former federal court judge. "It's about a failure of a corporate culture to effectively govern itself as it should."
Pro called the commission "Guardians of the integrity of gambling," with a responsibility to make sure license holders "don't do things that bring disrepute on the industry" in Nevada.
The previous highest fine in state history was $5.5 million in 2014 against the sports betting and mobile gambling system company now known as CG Technology.
Commissioners John Moran Jr. and Deborah Fuetsch said they considered a higher fine, but did not specify an amount.
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Chairman Tony Alamo said $20 million "makes it clear to all licensees that this culture cannot be tolerated," while also letting the publicly traded company "heal."
"It needs to move needles here," he said. "It needs to ring across the entire country."
Steve Wynn himself was not part of the settlement, and neither Wynn nor any personal representatives attended the commission hearing. Wynn has denied all allegations against him. One of his attorneys, Colby Williams, said by telephone that he was aware of the fine but declined to comment.
The commission has frozen Wynn's Nevada casino license. It has not taken other disciplinary action against him or the other board members and executives named in the settlement. None are still with the company.
"Isn't it strange that the people...that are the subject of this aren't even in the room today?" Moran observed of the new slate of company executives and board members sitting before him. "The people that are in this room now...they're left with the train wreck to try to fix it."
Wynn resigned as board chairman and company CEO in February 2018 following reports that he harassed or assaulted several women. He also sold his company shares.
Details about the investigation and its findings were not made public.
But Wynn Resorts acknowledged in settlement documents that several former board members and executives knew about but failed to investigate after Wynn paid $7.5 million in 2005 to a former salon employee who alleged he raped her and that she became pregnant as a result.
"Mr. Wynn...engaged in intimate and sexual conduct with (company) employees," the settlement documents said.
The company also failed to investigate a cocktail server's allegation that from 2005 to 2006 Wynn pressured her into a nonconsensual sexual relationship, the documents said. Wynn paid a $975,000 private settlement to that woman and her parents, the settlement said.
Wynn Resorts neither admitted nor denied that company executives were made aware of allegations that Wynn sexually harassed multiple flight attendants on company aircraft.
"The company's initial response during this period was driven by Mr. Wynn's adamant denial of all allegations," said a statement from Wynn Resorts spokesman Michael Weaver. It acknowledged a "short-sighted focus on initially defending Mr. Wynn, rather than reassuring employees of the company's commitment to a safe and respectful work environment."
The company points to wholesale leadership changes, including hiring a new chief executive, requiring new sexual harassment prevention training for all employees and adding a women's leadership council to promote equality in the workplace.
"In sum, these 25,000 employees, led by CEO Matt Maddox and a reshaped board of directors, are the company that stands before the commission today, and not Steve Wynn," the company said in its Jan. 25 written settlement.
A company settlement also is pending in Massachusetts, where gambling regulators launched a similar investigation of whether Wynn Resorts should be allowed to operate a more than $2 billion Boston-area casino resort slated to open in June.
Wynn's name was removed the project now called Encore Boston Harbor.
Steve Wynn sued to prevent release of a Massachusetts Gaming Commission report about that probe, arguing it contains confidential information that is protected by attorney-client privilege. A hearing is scheduled Monday before a Nevada judge who has temporarily blocked release of that report.
The Nevada fine "sets an unfortunate benchmark, but a necessary one for the industry and Wynn Resorts as a company," said Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada, Las Vegas.
"It will be interesting to see how this affects what Massachusetts is going to do," she added.
Wynn Resorts traded at more than $200 per share before the Wall Street Journal report, and closed at about $165 after Wynn resigned. Company stock closed at $130.45 on Tuesday, up $1.25.
