The relationship between Steve Wynn and his former company just went from bad to worse.
Wynn, who was forced out as chairman and CEO, and a chief shareholder of the company he founded following allegations of sexual harassment and assault, filed a suit in Clark County, Nevada, against Wynn Resorts and the Massachusetts Gaming Commission. Wynn alleges that the company released information to the commission that was protected under attorney-client privilege and therefore should not have been passed on.
In the suit, Wynn asks that a report complied by the commission on his alleged activities be blocked because it “contains, discloses or otherwise relies upon Mr. Wynn’s attorney-client privileged communications or other protected material, including material protected by Mr. Wynn’s privacy rights.”
There was no response from Wynn Resorts, but the Massachusetts Gaming Commission said it wasn’t surprising given Wynn’s “litigious tendencies.”
“The commission has retained legal representation in Nevada to mount a vigorous defense against his effort to block the release of our months-long investigatory report and to defend against Mr. Wynn’s baseless claims for damages,” said commission spokeswoman Elaine Driscoll. “It is our intention to bring this matter to a swift resolution. The commission’s investigative arm remains focused on its preparations to soon present the commission with the full extent of its findings.”
At the very least, however, observers expect the release of the report to be delayed. It was scheduled to be discussed in December.
Meanwhile, the third-quarter earnings report for Wynn Resorts was a mixed bag for the company. CEO Matt Maddox revealed that the company had halted work on Paradise Park, Steve Wynn’s vision with a lake, another hotel and other non-gaming attractions. Maddox said work on the expansion of the convention space at Wynn Las Vegas would continue. He also said the golf course would be reopened, and the company has brought in the original designer of the course, Tom Fazio, to rebuild the affected areas. According to Maddox, closing the course cost the company between $13 million and $15 million in ancillary business.
In Macau, Maddox said Wynn Palace will add two hotel towers with approximately 1,300 rooms to its seven-acre property in the city’s Cotai district. Construction of the hotels and a non-gaming destination called the Crystal Pavilion will begin construction in 2020.
Maddox said the plan will “take that property from 1,700 hotel rooms to over 3,000, which is really where we need it to be.
“We have a seven-acre (2.83-hectare) parcel next to Wynn Palace and we’ve been working very hard on what could come next,” Maddox said. “What we have so far is a 1.5 million-square-foot (139,355-square-meter) facility that we think will be a must-see in Macau.” Maddox added that the Cotai property “needs more hotel rooms” to reach EBITDA of more than US$1 billion. Also in the plan is a glass structure, the Crystal Pavilion, featuring a “fully immersive” theater, he said.
“We plan on presenting this concept in the next couple of months working through 2019 on the permitting, finalizing the design, getting everything together and beginning construction in 2020.” He said it’s too early to talk about cost or possible opening dates.
According to GGRAsia, Wynn Macau Ltd. reported total operating revenues of approximately US$1.31 billion in the third quarter, up 20.5 percent year-on-year. Casino revenue was up 19.4 percent to about US$1.131 billion on the strength of Wynn Palace. Net profits were nearly US$223.5 million in the three months to September 30, more than double compared to US$90 million during the same period in 2017.
The Wynn Palace generated operating revenues of US$730.6 million for the third quarter, an increase of 39.1 percent from a year earlier. Third-quarter gaming revenues were US$625.6 million, up 39.9 percent from the prior year. Table games turnover in VIP operations was US$15.53 billion, a 13.4 percent year-on-year increase. VIP table games win was up 3.01 percent, and table drop in mass-market operations up 37.3 percent to US$1.19 billion. Operating revenues from Wynn Macau came to US$579.6 million for the third quarter, up 3.1 percent from the prior-year period.
Casino revenues from Wynn Macau were US$503.6 million for the period, a less than 1 percent increase from 2017. Table games turnover in VIP operations was US$13.97 billion, up 4.4 percent, and table drop in mass-market operations was US$1.18 billion, an increase of 10.6 percent over 2017.
And finally, Phil Satre is the new chairman of Wynn Resorts.
Satre, a legend in the gaming industry from his years at the helm of Harrah’s Entertainment, and the choice of activist shareholder Elaine Wynn for the post, officially succeeded to it in an announcement from the board issued last Wednesday.
His appointment caps a tumultuous process led by Wynn and dating back to the spring to reshape the company’s board of directors following the sexual harassment allegations that forced out her ex-husband, Steve Wynn, and made her Wynn Resorts’ largest individual shareholder.
Satre, who joined the board in August as vice chairman, replaces long-time chairman D. Boone Wayson, a close family friend of Steve Wynn’s who’d been with the company since its inception.
Wayson is retiring from the board.
Satre resigned as chairman of slots and systems giant International Game Technology when he joined the Wynn board but remains president of the National Center for Responsible Gaming. He also has served as chairman of Nordstrom Inc. and Nevada utility provider NV Energy and as a director of Rite Aid Corp. He is a member of the American Gaming Association’s Gaming Hall of Fame.
Harrah’s was arguably the most admired company in the industry during his long tenure as chairman and CEO, making him a good fit to head a board that has been almost completely reconstituted since the Wynn scandal with six new directors and now includes four women.
His presence is expected to exert a steadying effect on a company still reeling from the scandal and provide support for new CEO Matt Maddox’s efforts to foster a more progressive corporate culture. It should go a long way as well toward appeasing regulators concerned that Wynn executives and members of the old board neglected to act on complaints from female employees about the casino tycoon’s alleged abuses and worked to cover them up.
The appointment also concludes months of hostilities between the company and its largest shareholder.
Elaine Wynn had aggressively challenged the board’s composition beginning in the spring, after Steve Wynn sold all his shares in the company and gave up a court battle dating back years over control of her stock.
In exchange for Satre’s appointment she has agreed to cap her current ownership stake, not nominate anyone to the board or seek to add additional members, not enter a proxy fight, and not seek to influence board members or senior management. She also has agreed to vote her shares in accordance with the board’s recommendations.
