As of Tuesday, February 6th, Steve Wynn is no longer chairman and CEO of Wynn Resorts. The change comes after the Wall Street Journal story that was published in late January that detailed allegations of sexual misconduct by Wynn over the course of multiple decades.
Wynn Resorts non-executive director of the board Boone Wayson released the following statement.
“It is with a collective heavy heart, that the board of directors of Wynn Resorts today accepted the resignation of our founder, CEO, and friend Steve Wynn…Steve Wynn is an industry giant. He is a philanthropist and a beloved leader and visionary. He played the pivotal role in transforming Las Vegas into the entertainment destination it is today.
He also assembled a world-class team of executives that will continue to meet the high standards of excellence that Steve Wynn created and the Wynn brand has come to represent.”
While Wynn still maintains his innocence, he concluded that resignation was the best decision for him going forward.
Wynn said in a statement.
“In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity. As I have reflected upon the environment this has created…one in which a rush to judgment takes precedence over everything else, including the facts…I have reached the conclusion I cannot continue to be effective in my current roles”.
The leadership change has already started to impact Wynn Resorts both domestically and abroad. On Wednesday, February 7th, trade in shares of Wynn Macau were paused on the Hong Kong Stock Exchange. However, by Thursday, February 8th, trading resumed and rose 6%.
Overall, the stock market in the United States has been experiencing some volatility as of late and Wynn Resorts has seen both an increase and decrease since Wynn’s resignation.
Since the Wall Street Journal story broke in late January, Wynn Resorts stock has decreased around 20%. But it is hard to neglect the fact the market as a whole has been declining, so it is likely the recent instability is a combination of both Wynn and the market as a whole.
Furthermore, the board of Wynn Resorts is now facing a lawsuit by shareholders. The shareholders are claiming that the board had knowledge of the alleged sexual misconduct by Wynn for years and failed to do anything about it.
Prior to the recent internal turmoil at Wynn Resorts, the company had been planning several new projects in Las Vegas, NV, Boston, MA, and Macau. Including, a new build in Las Vegas, Wynn West, and an expansion project in Macau.
It can be argued that with the absence of Steve Wynn, Wynn Resorts may lack the ability to effectively plan or continue ongoing projects. Wynn was regarded as a smart, business savvy, casino mogul. He had demonstrated the ability to be successful in the gaming industry even prior to starting Wynn Resorts, having developed Treasure Island, The Bellagio, and The Mirage.
Wynn also had power and influence where it mattered most. He was the finance chairman for the Republican National Committee (RNC) and knew how to motivate investors and raise capital for projects. Without Wynn at the helm, there are definite challenges for Wynn Resorts as it pertains to raising capital and executing ideas and projects. His knowledge, leadership, and vision will certainly be missed.
As for the projects in Las Vegas and Macau, there are now new challenges and increased risk. Particularly with the Macau expansion project. Many are unaware, but Wynn Macau accounts for over half of Wynn Resorts’ business. And the market in Macau shows no sign of slowing with or without Wynn Resorts present. However, Wynn Resorts was able to grab the majority of the market share in Macau by attracting elite, high-roller gamblers.
With the newfound negative press and uncertainty, Wynn Resorts could be facing increased scrutiny in Macau and in the United States. Gaming regulators in Nevada and Massachusetts are already investigating the sexual misconduct allegations and punitive actions, which in turn can cause further scrutiny in Macau.
Under Macau’s gaming law, the reputation of a gaming operator and its controlling shareholder is strongly considered in the bidding process for gaming licenses. Luckily for Wynn Resorts, they have already obtained their license and have been operating for quite some time. Nevertheless, the unwanted negative attention and damaging allegations may negatively affect the pending expansion project in Macau and are something that will certainly be monitored as this story and the year progresses.
Additionally, the company’s Macau operator license expires in 2022. While there have been no additional renewal parameters set by the government in Macau, Wynn Resorts may also face another challenge when attempting to renew their license and continue to operate without Steve Wynn.
Wynn’s exit and allegations have not only affected existing business and markets, but it is showing signs of affecting potential markets as well, most notably Japan. The people and the government of Japan are still working through the ongoing opposition of casinos in their country, however, with the success in Macau, particularly with Wynn Resorts, Japan is a prime candidate for expansion as the aim to legalize casino gambling.
As of today, it is still unclear if Wynn’s conduct will affect any legislative decisions in Japan or Macau for the matter, but Steve Wynn himself has previously expressed interested in entering the Japanese market when the time was right. It can be argued that the Japanese may have increased doubt regarding legalized casinos and potentially allowing Wynn Resorts to enter a regulated market in the future.
Wynn Resorts has stated that they are continuing as planned with their ongoing projects, including the construction of Wynn Boston Harbor in Boston, MA.