Massachusetts Gaming Commission Prepares Wynn Resorts Report

Massachusetts Gaming Commission Report Wynn Resorts

Cathy Judd-Stein was appointed Massachusetts Gaming Commission chair by Gov. Charlie Baker on January 15, 2019.

The Massachusetts Gaming Commission is in position to finalize and publish its investigative report into Wynn Resorts in the coming days and week. On Tuesday, Nevada judge dimissed the Steve Wynn lawsuit which stood in the way of the long-awaited MGC report.

Clark County District Court Judge Elizabeth Gonzalez dismissed the case after lawyers for Steve Wynn came to a settlement with the Massachusetts Gaming Commission. Steve Wynn launched lawsuit in November 2018 to block the publication of documents that he argued were protected by attorney-client privilege.

Steve Wynn’s lawyers argued that Wynn Resorts handed over the documents to Massachusetts investigators without proper permission to do so. Judge Gonzales agreed Steve Wynn had legal standing for the suit, a decision which held up the MGC report since December.

In her dismissal order, Judge Gonzales wrote, “It is hereby ordered that this action is dismissed with prejudice, each party to bear his/her/its own fees and costs.”

Cathy Judd-Stein on Wynn Report

Anticipating the judge’s decision, MGC Chairwoman Cathy Judd-Stein justified settlement of the lawsuit by stating last week, “The commission executed this action after receiving advice from our legal counsel, and the necessary assurances from investigators that this commission will receive all material and substantive information required to make a fully informed decision.”

“This step also brings to a close the uncertainty of prolonged litigation and allows this important process to now advance.”

Encore Boston Harbor Grand Opening

The case is pivotal in the expected grand opening of the $2.4 billion Encore Boston Harbor in June 2019. Encore Boston Harbor is the gaming resort in Everett being developed by Wynn Resorts, which defeated several rivals to win the right to the casino license: Caesars Entertainment, Mohegan Sun, and Suffolks Downs among them.

The Massachusetts Gaming Commission’s investigation was designed to determine whether Wynn Resorts deserves to maintain its casino license for the Everett casino. When the probe was launched in May 2018, MGC commissioners were concerned that Wynn board members had ignored Steve Wynn’s misconduct since at least 2005.

Nevada Gaming Commission Fine for Wynn Resorts

Wynn Resorts tacitly acknowledged that was the case when it added 4 new board members and saw to the stepping down of all board members who served during the pivotal year of 2005. A scatching report and $20 million fine by the Nevada Gaming Commission also confirmed the previous board’s lack of responsible oversight.

Many expect the MGC report to take the same stance as the Nevada Gaming Commission’s probe, which was to castigate previous leaders and impose punishments — while allow Wynn Resorts to maintain its casino license. To do otherwise would throw into doubt a multi-billion dollar projects designed to give thousands of Boston-area residents jobs.

Sterling Suffolk Lawsuit

Encore Boston Harbor has other concerns. Last month, Sterling Suffolk Racecourse amended a September 2018 lawsuit against Wynn Resorts and FBT Everett Realty, the company which sold Wynn the 33-acre plot of land for Encore Boston Harbor.

The amended lawsuit by Sterling Suffolk alleged that Everett Mayor Carlo DeMaria accepted kickbacks in order to push through the Wynn Resorts-FBT Everett Realty deal. The plaintiffs want $3 billion in damages from the suit.

FBT Everett Realty’s lawyers recently filed a motion to dismiss in the US District Court in Boston, stating that Sterling Suffolk, “Has doubled down on its frivolous original complaint. Sterling is betting that it can fool the Court into thinking that a litany of salacious allegations relating to Steve Wynn and Wynn Resorts Limited’s not-yet-open casino hotel are sufficient to state a federal RICO violation.”

Update: April 1 MGC Hearing

In an update, the Massachusetts Gaming Commission plans to hold an April 1 hearing on the state of the Wynn Resorts casino license for Encore Boston Harbor. In anticipation of that hearing, Wynn Resorts submitted a memo to the Gaming Commission claiming it has undergone a “complete transformation” over the past year. The memo stated that executives associated with Steve Wynn’s time as company leader have been purged from the board and the company has instituted comprehensive new policies to avoid a repeat of the previous misconduct.

The memo stated, “That the inappropriate breakdown of controls experienced by the Company during the Steve Wynn era never happens again….Over the past 12 months, Wynn Resorts has undergone a corporate transformation. The individuals who failed to live up to the Company’s high standards and values have all been removed.”

Whether the memo assuages concerns about Wynn Resort’s failure to rein in its former CEO will be largely determined at the April 1 hearing. It is hard to believe the MGC would strip Wynn of its casino license two-and-a-half months before Encore Boston Harbor’s grand opening, but if Massachusetts follows Nevada’s lead, a substantial fine might be in order.