The Nevada Gambling Commission has handed Wynn Resorts a record $20m fine, for failing to conduct a ‘proper investigation’ into claims of alleged sexual misconduct made against Steve Wynn. The founder of Wynn Resorts, Steve Wynn resigned shortly after the allegations surfaced.
The Wall Street Journal first reported on the claims a couple of years back, and they stated that multiple women had alleged that they were subject to various forms of assault or harassment from Wynn. After the report was published, an investigation was launched, and the conclusion and decision was made by the Nevada Gambling Commission to issue the fine.
Luckily for Wynn Resorts, they will get to keep their gambling license – allowing them to continue offering gambling services in their casinos – and while the fine may appear high, it’s worth pointing out that it’s more to do with the company’s methods of investigating the complaints, rather than the alleged actions.
Speaking of the decision, former federal court judge, Philip Pro, said: “It’s not about one man. It’s about a failure of a corporate culture to effectively govern itself as it should.”
It’s a Record-Breaking Fine
The Commission is known for issuing its high fines and levies – but the penalty issued to Wynn Resorts breaks records significantly. Previously, the largest fine handed out by the company was $5.5m, given to CG Technology back in 2014.
Apparently, the commission had talked about issuing Wynn Resorts with an even larger fine, but this was deemed to cause the publicly-traded company potential harm, so the commission descided upon $20m instead.
It’s important to note that Steve Wynn denies all of the allegations, and the police are conducting their own investigations into the claims. Steve Wynn’s casino license has also been frozen, but as of now, at the time of writing, no action has been taken against him, or any of the executive board members who were named within the settlement.
The exact details of the investigation have not yet been made public, but the Wall Street Journal reported that Wynn Resorts paid a settlement of $7.5m to a woman in 2005, who alleged that she was raped by the casino mogul. This rape then lead to a pregnancy.
Steve Wynn made another settlement agreement in 2006, when a woman alleged that he pressured her into a non-consensual sexual relationship. The settlement figure was reported to be worth $975,000. While not confirmed, there were also other reports of Wynn acting inappropriately to flight attendants duruging company flights. However, these incidents were not investigated by the company.
Since all of these allegations have been made public, Wynn Resorts have implemented significant changes in their internal reporting system, and all workers are now required to complete anti-sexual harassment prevention training, to ensure the chances of these incidents happening in the future (and going unreported until years later) is minimised. The resort has also introduced a new leadership council for women, that is tasked with promoting equality within the company.
It Doesn’t End There
Unfortunately for Wynn Resorts, the fine handed out by the Nevada Gambling Commission isn’t the end. Because the resort has recently been awarded a casino license in Massachusetts, the Massachusetts Gaming Commission are also looking into the settlements, and they claim that Wynn Resorts did not disclose the financial settlements when applying for a license from the commission. If the commission rules against Wynn Resorts, there’s a strong possibility that they could end up losing their gambling licenses. This would prove further problematic for the casinos.
Whether Wynn Resorts can recover from the financial penalties and the (potential) loss of licenses remains to be seen. However, with the investigation coming to a conclusion last month in January, it shouldn’t be long until a decision is made, and shareholders will be crossing their fingers!