Wynn Resorts on Tuesday paid the $35 million fine imposed on it by the Massachusetts Gaming Commission and the $500,000 fine imposed on CEO Matt Maddox, though the company's board of directors said it strongly disagreed with the commission's punishment of Maddox.
Last month, the commission ruled that Wynn Resorts could keep the license for its $2.6 billion Everett casino despite errors in handling issues involving Steve Wynn and the "considerable shortcomings" of Maddox, the current chief executive who was Steve Wynn's hand-picked successor. The commission fined the company $35 million, fined Maddox $500,000 and ordered that the company agree to be monitored by an independent observer.
"The Board of Directors of Wynn Resorts appreciates the findings by the Massachusetts Gaming Commission that it, and its qualifiers, remain suitable by clear and convincing evidence. The Company will not file an appeal," the company's board wrote in a statement Tuesday.
But the board members, who testified in strong support of Maddox during the commission's adjudicatory hearing in early April, said they "do not agree" with the commission's finding that Maddox violated the company's own policies and said a number of the commission's statements related to Maddox "are not supported by the evidence."
"We would support his decision to exercise his rights and appeal the fine imposed upon him, and believe he would rightly prevail in his appeal," the board wrote in a statement that came three days before the deadline for the company and Maddox to pay their fine or appeal. "However, that appeal would delay the final conclusion of this matter, and therefore we appreciate Matt's decision to forego an appeal in order to allow closure for the Company."
In January 2018, the Wall Street Journal published a report detailing an alleged "decades-long pattern of sexual misconduct" against Steve Wynn, including allegations that he raped an impregnated a manicurist at a Wynn Resorts salon. Steve Wynn has denied allegations of non-consensual relationships.
Maddox was a particular point of focus among the commission and its investigators during its three-day adjudicatory hearing in April. He explained that when he learned of at least three different settlements and alleged incidents involving Steve Wynn, he either did not believe the allegations to be true, was not concerned by what he was told about the settlement or did not think it was his duty to ensure that Massachusetts gaming regulators were notified.
In all instances, Maddox said others at Wynn Resorts had more knowledge of the settlements or allegations and that not all of the information revealed by the Gaming Commission's Investigations and Enforcement Bureau report was known to him before he became CEO.
The commission, by a split vote not detailed further in the commission's written decision, agreed that Maddox remains suitable to run a gambling company doing business in Massachusetts.
"The Commission concluded that Mr. Maddox has, at critical junctures, demonstrated questionable judgment and other considerable shortcomings in many facets of his responsibilities as CFO, President, and CEO," the commission wrote. "The majority of the Commission determined, however, that these shortcomings bear primarily on his competence, not his suitability."
In a post-hearing brief it filed to defend Maddox's leadership, Wynn Resorts argued that the Gaming Commission was "applying a different standard of suitability to Mr. Maddox, one that judges his leadership, which is not a statutory criterion."
In addition to the $500,000 fine imposed upon Maddox, the commission also ordered that he undergo "coaching and training" around leadership development, appropriate internal communications and enhanced awareness of human resources issues.
The Wynn Resorts board said the company on Tuesday "delivered payment" of both fines, a total of $35.5 million, to the Gaming Commission.
In an annual filing with the U.S. Securities and Exchange Commission, Wynn Resorts reported that it took in $6.7 billion in operating revenue in 2018 between its properties in Las Vegas and the Chinese gambling enclave of Macau.
The $35 million fine imposed by Massachusetts regulators represents just less than two day's worth of revenue for the company. The $35 million will be deposited into the gaming revenue fund, which then directs the money towards local aid, transportation, education and more.
"Pursuant to the Commission’s Decision and Order issued on April 30, Wynn Resorts has paid $35.5 million in fine payments and accepted the conditions outlined in the written decision," the Gaming Commission said in a statement. "The five-member commission will now ensure compliance with the imposed requirements as they look forward to a successful June 23 opening of Encore Boston Harbor."
Wynn Resorts' $2.6 billion Encore Boston Harbor project on the banks of the Mystic River in Everett is expected to open at 10 a.m. on June 23.