Casino licensee given 30 days to pay $35M fine

Unless it plans to challenge the ruling in court, Wynn Resorts has 30 days to come up with the $35 million fine imposed Tuesday by the Massachusetts Gaming Commission in a decision that appears to clear the way for Wynn's $2.6 billion Encore Boston Harbor casino to open next month as planned.

Other than to say that it is reviewing the ruling and its punishment, Wynn Resorts has not publicly responded to the commission's decision to allow the company to keep its Boston-area casino license if it pays the fine, agrees to have an independent observer monitor the company's progress in bolstering its compliance and human resources policies, and has CEO Matt Maddox undergo executive coaching and pay his own $500,000 fine.

After deliberating in private for a month, the commission on Tuesday handed down its ruling and said it was troubled by Wynn Resorts' "significant" and "repetitive" failures related to sexual misconduct allegations against founder Steve Wynn and Maddox's "considerable shortcomings" as its chief executive.

"Although the commission did not find substantial evidence necessary to disrupt the licensee's suitability status, the decision speaks for itself," chairwoman Cathy Judd-Stein said Wednesday. "We, the entire commission, were profoundly disturbed by repeated systemic failures and the pervasive culture of non-disclosure."

Judd-Stein said the commission settled on $35 million because "that fine reflects the scope and multitude of the violations" and "should serve as a punishment to really address those violations we felt were the responsibility of certain executives and certain members of the board of directors."

Commissioner Enrique Zuniga said the fine "is meant to also act as a deterrent" for Wynn Resorts and other operators.

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 would represent just less than two day's worth of revenue for the company if it elects to pay the fine. The $35 million would be deposited into the gaming revenue fund, which then directs the money towards local aid, transportation, education and more.

"Any fine that is assessed would be paid within 30 days of the assessment of the fine, unless there is a request for judicial review," general counsel Catherine Blue said. "If the person requesting judicial review is the person who's paying the fine, the money goes into escrow in a court unless there is a petition to the court to replace that with a bond."

Blue later added, "The most logical next step would be review by a court, which would be the Superior Court in this case, and the licensee could do that if they so choose."

Asked Wednesday morning about the possibility of the company seeking a judicial appeal of the commission's decision, Wynn Resorts spokesman Michael Weaver reiterated that the company had been "carefully considering the decision and the full range of our next steps" since it got the ruling late Tuesday.

Asked Wednesday morning if there is anything aside from the possible court appeal that might keep Encore Boston Harbor from opening on June 23, Gaming Commission Chairwoman Cathy Judd-Stein said, "Not that we know of."

"There continues to be many decisions in front of us and we will be starting to address those going forward in our meetings between now and their anticipated opening date," Judd-Stein said.

Since the commission launched its investigation in February 2018, Wynn Resorts has been building its Encore Boston Harbor project on the Mystic River in Everett on a parallel track.

"We thought we were going to be addressing this issue a little earlier than we have and there was this real milestone, if you will, lingering on the horizon with the scheduled opening of this operation," Zuniga said Wednesday. "But at no time did we want to compromise, and I don't feel that we did, these two processes I'm talking about. We operated on parallel tracks. But importantly, we had to address this and get it right. I really believe that we did and the decision speaks for itself."

Also Wednesday, Connecticut-based casino operator Mohegan Sun, which was unsuccessful in its previous attempts to secure the Boston-area casino license and has been suing the commission, suggested that information detailed in the commission's decision could become part of its pending suit.

"Mohegan Sun's ongoing litigation challenging the award of the Region A license continues, and certain evidence from the suitability proceeding will likely be material to our litigation," the company said in a statement.