A big sigh of relief lingered over One Horizon Way on Monday afternoon, as the Encore Boston Harbor folks received word that the Massachusetts Gaming Commission (MGC) would allow Steve Wynn to be removed from the gaming license – effectively signaling that they believe the company is moving in the right direction for the moment.
An ongoing investigation, however, does continue at the MGC with results expected in the summer. The news on Monday did signal to many that the steps taken by the company since the investigation began in February are viewed in positive terms by the Commission.
“Based on the evidence presented, Wynn Resorts has worked quickly to separate itself from Mr. Wynn, including emblematically changing the name of the Everett property to Encore Boston Harbor,” read the decision by the MGC. “The Commission rejects the characterization by Mr. Wynn’s legal counsel that he is nothing more than an ordinary private citizen of the State of Nevada vis-a-vis Wynn Resorts. There is, however, substantial evidence that the relationship between Mr. Wynn and Wynn Resorts has been terminated in a meaningful way such that Mr. Wynn no longer falls with the definition of qualifier at the conclusion of the upcoming annual shareholders meeting.”
The caveat in the decision, on the technical side, was that Steve Wynn will remain a qualifier until there is notification that he did not vote his shares at an upcoming May 16 Wynn Resorts shareholder’s meeting.
Steve Wynn has indicated to company executives that he would not vote his shares at the upcoming meeting. However, the MGC said they wanted written confirmation of that, and until that happens, Wynn would remain a qualifier.
“There is no legal prohibition that bars Mr. Wynn from changing his mind and voting at that meeting,” read the report. “Accordingly, until the conclusion of that meeting, Mr. Wynn is still a qualifier under category.”
A second caveat refers to a “city ledger” account that has unexpended funds in it. Once those are exhausted, that matter will be resolved as well.
Wynn Resorts said it was “pleased” by the decision and is ready to move forward with Encore Boston Harbor – despite persistent rumors about some board members wishing to sell the property, as reported by shareholder Elaine Wynn last week.
“We are pleased that the Massachusetts Gaming Commission has concluded Steve Wynn no longer has any involvement in our company and should no longer be considered a qualifier,” said Michael Weaver, spokesman of Wynn Resorts. “We look forward to continuing to move Encore Boston Harbor forward.”
The decision was very technical, and it noted that the leaders of the company have taken great steps to separate themselves in a short period of time from Steve Wynn following the sexual misconduct allegations that rocked the company in January.
For the obvious connections to the company, such as stock ownership or an executive position, the MGC said that Wynn clearly had been removed. Having sold his stock and resigned as CEO, he was obviously no longer a “qualifier” in that sense.
However, there was concern as to whether the company had moved far enough away from its founder to state he no longer was a “close associate,” or could pull the levers of the company from a distance.
There was considerable discussion of the direct contact that happened after Wynn’s resignation, contact CEO Matt Maddox discussed during a hearing on Friday, April 27.
“The evidence demonstrates, though, that these communications, when viewed in context, were largely if not entirely related to Mr. Wynn’s orderly separation from the company; whether for purposes of negotiating the terms of the separation agreement, use of the company plane, discussing fair value for the disposition of his ownership stake, ownership of the art collection, or the settlement of litigation,” read the report. “…In fact, it would have been nearly impossible to achieve any of these results without such communication. Though Mr. Wynn may have inquired of Mr. Maddox as to ‘how things are going,’ it seems clear that Mr. Maddox is well aware of the pitfalls of engaging in such discussions and steered clear of offering any type of substantive responses to the inquiries. Ultimately, to allay any lingering concerns that Mr. Wynn may be directing the show from behind the curtain, Mr. Maddox stressed that this was not the case.”
The MGC also gave credit to the company for establishing a policy where all officers and directors of the company are asked to report to Wynn’s Jacqui Krum and direct or indirect contact with Steve Wynn. That reporting would be mandated and would be passed on to the MGC in a timely manner.
“While it would be impossible to expect that there be no communications between Mr. Wynn and any officers or directors, it is reasonable to expect that any such communications be minimal and unrelated to the operation of the company or its future endeavors,” read the decision.
The decision also noted that Wynn’s separation agreement allowed him to rent a home at Wynn Las Vegas until June 1. However, he has vacated his residence at the resort hotel.
Locally, Councilor Michael McLaughlin said he was happy to see the decision come down in favor of Encore and hopes that it leads to a solution.
“I am very pleased and thankful for the members of the MGC for their due diligence and quick response,” he said. “I fully believe they got the decision correct. I look forward to the conclusion of the continuing investigation and a solution. The work is going ahead strongly, and I look forward to working with the company to ensure Encore Boston Harbor will open June 2019 on time.”