Stephen Crosby Resigns as Massachusetts Gaming Commission Chairman

Massachusetts Gaming Commission Chairman

Stephen Crosby resigned 5 months prior to the end of his tenure as Massachusetts Gaming Commission chairman.

Stephen Crosby resigned from his seat as the director of the Massachusetts Gaming Commission (MGC). The chiarman’s term as the state’s leading gaming regulator had been controversial, though Crosby’s resignation was a surprise to most observers.

Boston area pundits called for Governor Charlie Baker to investigate Stephen Crosby’s decision to resign weeks before a key decision on whether Wynn Resorts should keep its casino license for Encore Boston Harbor.

Instead, Gov. Baker appointed long-serving MGC commissioner Gayle Cameron as the interim chairperson for the Gaming Commission. Gayle Cameron will oversee the decision whether Wynn Resorts is allowed to operate the $2.4 billion casino it has built over the past several years.

The decision on Encore Boston Harbor ie expected in the coming weeks.

Masssachusetts Gaming Commission’s Probe

The announcement the MGC would review Wynn’s casino license came in May 2018, two months after Wynn Resorts founder and CEO Steve Wynn resigned from the company. Steve Wynn resigned amidst sexual misconduct allegations, eventually divesting himself of $3 billion in Wynn shares.

The MGC probe came as Wynn’s ex-wife, Elaine Wynn, was fighting to purge the Las Vegas casino company’s board of directors of Steve Wynn partisians. Elaine Wynn claimed those men were complicit in Steve Wynn’s alleged wrongdoing, and thus ill-suited to lead the $17 billion corporation into the future.

Stephen Crosby’s Resignation Letter

In his resignation letter to fellow MGC commissioners, Stephen Crosby said, “There has never been a shred of truth or accuracy to any charge of bias, favoritism, corrupt practice, ethics violations, or prejudgment in my execution of this job.”

To explain his decision to resign, Crosby showed letters from Wynn Resorts and Mohegan Sun which accused him of bias. Like a baseball umpire who cites displeasure from both teams, the former MGC chairman said the letters were evidence he had been fair to the two sides.

Crosby’s Shows Letters from Mohegan Sun, Wynn

The Mohegan Sun letter was sent at a time when the Connecticut casino was partnering with Suffolk Downs on a rival bid for a Boston casino, which Wynn Resorts ultimately won. Mohegan Sun claimed Crosby had favored Wynn Resorts in the process.

The letter from Wynn Resorts came more recently, at a time that the Massachusetts Gaming Commission is deciding whether to strip the casino license from Encore Boston Harbor, Wynn’s casino in the Boston suburb of Everett.

Stephen Crosby’s conduct as MGC chairman raised eyebrows at times. He was censured by a Massachusetts ethics agency for his handling of the Boston area casino bids. Eventually, Crosby recused himself from the process, though anonymous sources later told the Boston Globe the former chairman continued to try to influence decisions behind the scenes. Days after those allegations were made, two Gaming Commission members resigned.

The MGC faced two lawsuits over Encore Boston Harbor during Crosby’s term in office. Those lawsuits were brought by Caesars Entertainment and Mohegan Sun, claiming Wynn Resorts received favorable treatment. A neutral observer can say that the MGC chose the $1.6 billion bid over the $900 million bid, so Wynn’s bigger bid presumably would create more jobs and invest more capital in the Boston economy.

Gayle Cameron’s MGC Term

Forbes pointed out that Gayle Cameron has her own credibility problems. In a 2016 federal trial, Cameron — who once served as Deputy Superintendent with the New Jersey State Police — said she had approved the Springfield casino license for MGM Resorts, despite knowing some of their executives lied to the MGC’s Investigation and Enforcement Bureau.

Gayle Cameron also admitted to approving C. Stanley McGee for an interim executive director position on the commission, despite knowing he had been accused of sexual assault by a minor. C. Stanley McGee eventually resigned from consideration after the charges became known to the public.

The incident caused Massachusetts Rep. Daniel Winslow (R-Winslow) to criticize commissioners, saying, “The core function of the gaming commission is due diligence. Due diligence starts at home.”

Wynn Resorts Licensing

In the months since the probe was launched, Wynn Resorts has tried to change its board of directors into a more acceptable body. New CEO Matt Maddox added three female board members, who also happen to be luminaries in their three fields. A respected former CEO of Harrah’s Entertainment (now Caesars) also was added to the board of directors, while a couple of Steve Wynn partisans announced they would not stand for board membership again.

Stephen Crosby had 5 months remaining on his term as Massachusetts Gaming Commission chairman. A new regulatory panel would have been appointed by Gov. Charlie Baker or his successor in the spring of 2019. Crosby presumably would not have received a second term as commissioner chairman.