Elaine Wynn is the company’s largest shareholder and is estimated to be worth $1.85 billion.
At the pivotal April 2nd Massachusetts Gaming Commission hearing where the fate of the Encore Boston Harbor casino license will be decided, Elaine Wynn, the estranged former wife of Steve Wynn, plans to testify. The MGC gave Wynn Resorts noticed it wanted the Las Vegas casino company to “encure” Elaine Wynn and several other figures attended the meeting.
Also on the list to testify will be Dee Dee Myers, the former White House press secretary in the Bill Clinton administration. Dee Dee Myers joined the Wynn Resorts board of directors last year, two months after company founder and chief executive Steve Wynn stepped down amidst accusations of sexual misconduct.
The Massachusetts Gaming Commission‘s notice told Wynn Resorts, “shall ensure that the following individuals are present at the hearing and prepared to address the issues…and respond to any other matters raised in the Investigative Report.”
Dee Dee Myers, skilled at public relations at the highest level, should be a good witness for Wynn Resorts. It is the inclusion of Elaine Wynn that could prove to be the greatest obstacle to Wynn Resorts retaining its license for a $2.4 billion Boston-area casino.
Elaine Wynn to Testify
Elaine Wynn alleged that the Wynn Resorts board of directors ignored or even covered up Steve Wynn’s unethical behavior for over a decade. The company’s new CEO, Matthew Maddox, purged the board of perceived Steve Wynn loyalists while adding four new members in the past 12 months.
Ms. Wynn’s testimony goes to the heart of the Massachusetts Gaming Commission’s probe into the board members’ conduct over the years. The notice the 5 commissioners sent to Wynn Resorts said its executives would be asked whether they “willfully provided false or misleading information to the Commission during the RFA-1 review process through to the award of the Region A gaming license.”
10 months ago, the MGC began a probe into the lack of institutional control the board seemed to have over their former leader. The Gaming Commission wants to determine whether “the inappropriate breakdown of controls experienced by the Company during the Steve Wynn era never happens again.”
Did Wynn Executives Lie to Regulators in 2014?
The term “RFA-1” refers to Encore Boston Harbor, the first-ever legal land-based casino built in the Boston metropolitan area. When Wynn Resorts received the license in 2014, eleven different Wynn executives had to undergo background check.
The review process calls for “extensive background investigations to ensure they meet the high standards for good character, honesty, integrity and financial suitability.”
If Elaine Wynn’s charges that the board covered up Steve Wynn’s alleged misconduct over the years, then it can be claimed board members lied to the Massachusetts Gaming Commission during the 2013 and 2014 vetting process. That could be grounds for the company losing the lucrative casino license, even though those board members no longer hold positions of authority in the company.
Wynn Employees Called to Testify at MGC Hearing
Besides Elaine Wynn and Dee Dee Myers, the full list of those called to testify is long, and suggests regulators plan to conduct a thorough examination of the board’s conduct through the years. The list of those who’ll testify include, Matthew Maddox, the current CEO and president who is also the sole remaining board member who served during the Steve Wynn era.
It also includes Craig Billings, Wynn’s current CFO and treasurer, and Rose Huddleston, the Senior Vice President (SVP) of Human Resources. Two attorneys will testify: Ellen Whittemore, an Executive Vice President and general counsel, and Jacqui Krum, an SVP and general counsel.
Board chairman Philip Satre, the former Harrah’s CEO who was hired a month after Steve Wynn stepped down, also will testify. So will Robert DeSalvio, president of Encore Boston Harbor president, and Brian Gullbrants, the EVP of Operations at Encore Boston Harbor. Finally, James Stern, the head of security, will speak before the hearing.
The list of those called to testify suggests that the Gaming Commission will discuss other issues besides the company’s past. Still, the main focus of the news media and commissioners appears to be Wynn Resort’s governance in years past.
About Elaine Wynn
Elaine Wynn married Steve Wynn in 1963, moved with him to Las Vegas in 1967 to take control of the Golden Nugget, and co-founded Mirage Resorts with her husband in 1976. In its 24 years of operations, Mirage Resorts built modern casino-resorts like The Mirage, Treasure Island, Bellagio, and Beau Rivage (Missisippi). In building the Las Vegas Strip resorts in the 1990s, Steve and Elaine Wynn ushered in a new era of the corporate casinos of family-friendly entertainment in Las Vegas.
Debt from developing the opulent resorts was too much, so MGM Grands Inc. (now MGM Resorts) acquired Mirage Resorts in 2000. The couple founded Wynn Resorts that same year, ultimately building world famous casinos like Wynn Las Vegas, Encore Las Vegas, Wynn Macau, and Wynn Palace.
Wynns’ Divorce and Lawsuit
Elaine and Steve Wynn divorced in 1986, but remarried in 1991. Their second marriage lasted 19 years, but the two divorced a second and final time in 2010. Despite the divorce, Elaine Wynn remained on the Wynn Resorts board of directors until 2015. Because she owned 9% of company stock, she sat on the board as one of the top shareholders.
In 2015, Steve Wynn forced his former wife off the board. A binding agreement meant she owned 9% of the shares, but could not turn those shares into liquid assets without her ex-husband’s permission. To gain the ability to sell her shares, Elaine Wynn filed a lawsuit and invoked whistleblower protection. During the resulting court battle, she suggested that the Wynn board had covered up Steve Wynn’s misconduct over the years.
Wall Street Journal Accuses Steve Wynn
In January 2018, the Wall Street Journal interviewed 150 current and former employees of Wynn Resorts. The WSF article accused Steve Wynn, who was serving as chairman of the RNC’s Finance Committee at the time, of sexual misconduct with an array of Wynn employees. The salon workers in his resorts were those quoted in the Wall Street Journal article, but a subsequent report by the Nevada Gaming Commission suggested Steve Wynn also had a weakness for “cocktail waitresses”.
For his part, Steve Wynn denied all allegations and said they were the result of his estranged ex-wife’s lawsuit. Whether that was true or not, the charges stuck enough that Steve Wynn stepped down from the company he founded in February 2018. When he sold his shares of Wynn Resorts in March 2018, Elaine Wynn became the largest shareholder in the company (estimated to be worth $1.85 billion). Though she does not sit on the board, she forced changes to the board, ultimately purging the directors whom she accused of being Steve Wynn allies.
The April 2nd hearing present an interesting scenario for Elaine Wynn and the gaming commissioners. On the one hand, Elaine Wynn could further take down the Wynn Resorts board stripped her director status four years ago. On the other hand, she’s effectively purged most members of that board and — as the company’s top shareholder — stands to lose if the multi-billion dollar Encore Boston Harbor has its license stripped.
