Even though gambling mogul Steve Wynn, 76, has finally resigned as the chairman and chief executive officer of Wynn Resorts after denying allegations of decades of sexual misconduct, the woes of the company he founded in the early 2000s are not likely to subside. In fact, they are expected to worsen. There are already speculations of hostile takeover attempts by domestic and international rivals, such as MGM Resorts International and Las Vegas Sands.
Wynn’s resignation from Wynn Resorts comes on the heels of his resignation as finance chairman of the Republican National Committee. A prominent supporter of President Donald Trump, he had presided over a record-breaking cash collection for the RNC. With this resignation, it looks like his sudden and swift downfall is complete.
How Wynn’s troubles began
The billionaire businessman’s troubles began when the Wall Street Journal published a detailed report about his alleged sexual misconduct spanning more than a decade, as well as a financial settlement amounting to $7.5 million paid to a manicurist who claimed Wynn pressured her to have sex with him. Wynn is still maintaining his position he was not involved in any wrongdoing and the poisonous environment was the result of the machinations of his bitter former wife.
The allegations of sexual misconduct against Wynn include exposing himself to massage therapists and making unwanted sexual advances to other women. The report claimed when women working in salons learned he on his way to their salon, they would hide in lavatories. But, Wynn has denied the allegations, calling the idea he assaulted any woman preposterous.
The report, published on Jan. 26, caused the shares of Wynn Resorts to tumble by as much as 20 percent. Wynn owns 12 percent of the company’s shares. Although it was well known that pressure was mounting on him to relinquish control of the company, his resignation still sent shockwaves through the gaming industry around the world. Trading in the shares of Wynn Macau listed in the Hong Kong Stock Exchange was halted on Wednesday.
Wynn’s empire-building days are likely over
The scandal has likely brought an ignominious end to Wynn’s empire-building days. This is sad considering the casinos were built to help transform Las Vegas and Macau into high-end luxury destinations for gamblers and tourists. His reputation was such that even his fiercest critics were not too stingy to praise him as a visionary and perfectionist.
The casinos built by the gambling tycoon include The Mirage, Bellagio, Wynn Palace, and Wynn Macau. The first two were grabbed by MGM Resorts International 18 years ago in what can be called a hostile takeover. At the time he resigned, he had his hands full with several ventures, including a new casino in Massachusetts, which is presently under construction; an expansion in Macau; a project under construction in Las Vegas; and the $2.4 billion Wynn Boston Harbor, which is expected to be hugely profitable when it opens next year.
The bulk of Wynn Resort’s financial exposure is in Macau, where its two casinos — Wynn Macau and Wynn Palace — raked in 75 percent of the company $1.7 billion pre-interest, pretax, pre-depreciation, and preamortization earnings last year. The concession the company holds from the Macau government is up for renewal in 2022.
Wynn was said to have near-absolute control over Wynn Resorts. Whatever the outcome of the inquiry of the special committee formed to investigate the allegations, its board of directors and senior executives are likely to come under scrutiny by regulators and investors over their failure to reign in their boss.
While Wynn was mulling resignation, regulators were already considering his company’s fitness to hold casino gambling licenses, increasing Wynn Resorts’ vulnerability to a hostile takeover from rival companies. Possible candidates include Blackstone, Caesars Entertainment, and MGM Resorts International. Analysts from JP Morgan Chase have said Wynn Resorts’ heavy CEO dependency spells trouble for the company at times like this.