Wynn Resorts Pays the $35 Million Fine, but Disagrees with the Commission’s Criticism of CEO Matt Maddox
Days before the predetermined deadline (May 31, 2019), Wynn Resorts has paid the $35 million fine issued by the Massachusetts Gaming Commission and the $500,000 fine against Matt Maddox, the company’s current CEO. However, the company has expressed open disagreement with the commission’s criticism of their CEO.
In an official statement, Wynn Resorts stated that they were pleased to find that the company remained suitable to run the $2.6 billion Encore Boston Harbor, scheduled to open June 23. The fate of the company’s license was uncertain while the Massachusetts regulator reviewed their response to the sexual misconduct allegations against the founder and former CEO Steve Wynn.
Apart from hefty fines, the MGC concluded Matt Maddox had violated the company’s policy during the investigation by omitting information and protecting other company officials. Moreover, the regulator issued a mandatory leadership training for Maddox, which he will have to undergo if he wishes to remain the head of the company.
Although Wynn Resorts had no complaints regarding the fine, the company was reluctant to accept the commission’s criticism of Maddox. In the official report, the company’s Board of Directors stated that they would support Maddox’s decision to file an appeal. Moreover, they are confident he would “rightly prevail in his appeal.” Still, the appeal would only further delay the matter, forcing the company to shift attention from the opening of the Everett casino.
The Massachusetts Gaming Commission has confirmed last Tuesday (May 30) that they have received payment for both fines. The commission’s spokeswoman, Elaine Driscoll, stated that the five-member commission would invest efforts in ensuring compliance with the imposed requirements but was looking forward to the June 23 opening of Bonton Encore Harbor.
Apart from the fines and the mandatory leadership training for Maddox, the MGC had another condition which Wynn Resorts will have to meet if they wish to keep their license. Namely, the company’s activity will be overseen by an independent monitor for a period of three years.
The commission had recently put out a Request for Response (RFR), seeking a suitable monitor for Wynn Resorts. The monitor’s primary focus will be on reviewing and evaluating the organizational changes and policies Wynn Resorts adopted. Moreover, they will try to ensure that the company’s conduct is aligned with the industry best practices and are, in fact, implemented by all of Wynn Resorts employees.
Maddox Allowed to Retrain Suitability
Troubles with Wynn Resorts date back to 2014 when Maddox first heard Steve Wynn asking employees for a “sensual massage” on several occasions. The commission questioned Maddox’s decision to look the other way then as well as his attitude after the Wall Street Journal article when he openly defended Wynn against the sexual allegations.
After lengthy deliberation, the commission concluded that “Maddox’s shortcomings bear primarily on his competence, not his suitability.” However, although the current Wynn Resorts CEO will be allowed to retrain suitability, this decision wasn’t unanimous.
Moreover, the $35.5 million fines Wynn Resorts paid are the largest in the history of the industry, showcasing the intensity of the situation. However, the company isn’t the only one disagreeing with the commission’s criticism of Matt Maddox. Andrew Klebanow, the senior partner at Global Market Advisors, described the entire situation as arduous.
In fact, he strongly disagrees with the leadership training imposed on Maddox. Given the fact that Matt Maddox is the CEO of one the most successful casinos, which holds many prestigious awards for being a fantastic place to work with, Kelbanow finds the commission’s message “insulting.”
The Everett Casino Remains the Top Priority
Despite not filing an appeal against the MGC’s decision, the company still argues that their current CEO “remains in good standing” after the Nevada Gaming Control Board’s thorough investigation.
In an official statement, the company wrote that they “firmly believe Matt’s leadership has been and will continue to be instrumental in the transformation from a founder-led company to an innovative global corporation.” Moreover, the company highlights that the current, the more diverse, inclusive, and respectful workplace is precisely the result of Maddox’s efforts.
Regardless, the company has clearly shown that the opening of Encore Boston Harbor is their number one priority and has opted against filing an appeal due to time constraints. Simultaneously, the company seems to have been preoccupied with talks regarding the potential sale of the Everett property to MGM Resorts. This fired off a series of questions from industry experts as well as the general public, but the talks came to a swift conclusion and Encore Boston Harbor will remain in Wynn Resorts’ possession.
All things considered, Brendan Bussman, a partner at Global Market Advisors, believes the company’s response and recent actions clearly show their commitment towards Everett and the state of Massachusetts. Furthermore, he believes it’s vital that the Board of Directors has faith in Matt Maddox’s leadership skills, even if the MGC remains doubtful.
In fact, Nevada has recognized the leadership change once Steve Wynn decided to step down as the company’s CEO. “It is unfortunate Massachusetts Gambling Commission didn’t recognize this as well with their ruling,” said Bussman. He commends Maddox’s bravery and adds that he isn’t certain he would be willing to “take one for the team” as the current Wynn Resorts CEO has.