‘Reckless’ decisions by Wynn might force him to lose gaming empire, noted journalist says
By Ray Hagar, Nevada Newsmakers
Nevada gaming mogul Steve Wynn will probably no longer be the chief executive and chairman of the board at Wynn Resorts after allegations of sexual misconduct were made against him, a leading gaming journalist said on Nevada Newsmakers Monday.
When asked if he could see a way Wynn could maintain his position — based only on the $7.5 million payout made to a manicurist who said she was forced to engage in a sexual act by Wynn — gaming journalist Steve Friess said: “I don’t.”
“It’s is a great question (if Wynn will lose his company) because Steve Wynn has made a series of decisions that have put him where he is,” Friess said.
The payout, which was mentioned in the divorce proceedings with Elaine Wynn, was an item in a story published by the Wall Street Journal last week which detailed an alleged decades-long pattern of sexual misconduct by Wynn.
Wynn pressured employees to perform sex acts, the Journal reported. Meanwhile, the Wynns remain embroiled in a court battle over a company share agreement stemming from the couple’s 2010 divorce. Steve Wynn has blamed his ex-wife for fueling the damaging story in the Wall Street Journal.
Friess, who has covered Wynn Resorts and its various international holdings for more than a decade, said Wynn’s “reckless” decisions put him in a position to lose the company, embarrass his board of directors and cause a drop in Wynn Resort stock prices and earnings, based on the $7.5 million payout.
“One is the way he treated his ex-wife,” Friess said about Elaine Wynn. “One is the way he treated the woman (involved in the $7.5 million settlement), whoever she is, and who has accused him of this. And one is the way he has disclosed this and kept his board (of directors) informed,” Friess said.
“I mean, (consider) the fact that the board was generally unaware of this settlement, the fact that the settlement was sitting out there as a ticking time bomb, and the fact that he insisted on litigating this divorce decree to this point where he organized an effort to get her, Elaine Wynn, off the board,” Friess said. “These are reckless decisions, now that we know what he knew.”
“He knew there was as settlement sitting out there, waiting to come out at some point, possibly,” Friess said.
“He knew there was this behavior that had been alleged,” Friess said. “Even if he were innocent, he knew there were allegations. And if he is going to say he paid off this woman for $7.5 million just to kind of make it go away, that would be a prudent decision if that was also a decision he was consistent with as it pertains to his wife.
“He knew his wife had all kinds of stuff on him and he still put the company at risk, pursuing a very hostile approach to the things that she wanted,” Friess said.
Friess suggested the best move for the future of Wynn Resorts is for Steve Wynn to resign. Wynn has already resigned as the as finance chairman for the Republican National Committee.
“Again, it all depends on how fast this board (of directors) moves,” Friess said. “And maybe Steve will realize that and just make it easy on everybody, which might be the easiest way to go.”
While stock prices for Wynn Resorts have fallen, the future could still be bright for the company, Friess said.
“Yes, if they move fast,” he said. “If they move fast and show they are not willing to accept this.”
Yet damage has been done, Friess said.
“The the damage to the company’s reputation and the damage to the shareholders value, including Mr. Wynn’s value himself, are really significant,” Friess said, later adding:
“So I don’t see why, if they get rid of him quickly and take some very significant public steps to show they are serious about this stuff, I don’t see why it can’t continue and thrive,” Friess said about the Wynn Resorts brand.
The scandal will probably not impact Wynn Resorts’ vast investment in Macau, Friess said. Yet Wynn and other U.S. gaming moguls must re-negotiate their licenses with the Chinese government in 2019 to operate on the Macau peninsula, according to the Business Insider.
“I find it hard to believe the Chinese government is going to care very much,” Friess said. “I know what the analysts have said but China is not having a ‘Me Too’ moment. They are not part of the American culture in that way.”
Yet the future in China may be risky, Friess said.
“There is certainly the power within the Chinese government to do anything they want, which is something I’ve warned Steve Wynn about for years,” Friess said. “They could seize his property and nationalize it if they want to because that is what their system of government is all about.”
Reporter’s note: Steve Friess has been published in the New York Times, Washington Post, Time, Columbia Journalism Review and Bizweek. He is a former reporter in Las Vegas and a 2012 Knight-Wallace fellow.
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