Steve Wynn: Time’s up

Yesterday, the penny dropped on Steve Wynn, as multiple reports of sexual predation made the news. According to the Wall Street Journal, we’re not talking about one or two accusers but “dozens,” over a period of decades. Without diminishing the gravity of the situation, this does not come as news: Wynn’s reputation as wolf dates back at least 15 years but almost no one has gone on the record about it before. According to the New York Times, the mogul “frequently demanded naked massages from female employees, sometimes pressuring them for sex and to masturbate him.” Wynn and his company threw Elaine Wynn under the bus, charging her with fomenting the whole thing to further her own lawsuits. “It is clear that Mr. Wynn’s ex-wife has sought to use a negative public relations campaign to achieve what she has been unable to do in the courtroom: tarnish the reputation of Mr. Wynn in an attempt to pressure a revised divorce settlement from him,” read a formal statement.

(The WSJ story is co-authored by Alexandra Berzon, who won a Pulitzer Prize for her coverage of “City Cemetary” [CityCenter] and is the best in the business.)

Details of the allegations (of which I’ve heard even worse) have a familiar ring, such as the intimidating presence of Wynn’s German Shepherds. Reported the WSJ, “Former employees said they sometimes entered fake appointments in the books to help other female workers get around a request for services in Mr. Wynn’s office or arranged for others to pose as assistants so they wouldn’t be alone with him. They told of female employees hiding in the bathroom or back rooms when they learned he was on the way to the salon.” The alleged victims, aware that they held some of the best-paying jobs in Sin City, generally found it in their interest to keep quiet and put up with behavior from Wynn that, if true, is too gross to be described in these pages.

Former salon director Jorgen Nielsen said that Wynn Resorts executives were aware of their boss’ predatory activities but “nobody was there to help us.” The late Dennis Gomes “routinely received complaints from various department heads regarding Wynn’s chronic sexual harassment of female employees,” back in the Golden Nugget days. “I’m not his pimp,” Gomes told his wife. Later, Wynn supposedly tipped those employees who got his rocks off with $1,000 in cash. “We would hide people,” said Nielsen. “People would hide when he’s requesting them to his room.”

Despite the plethora of accusers, Wynn denounced the whole thing as a witch hunt. “The idea that I ever assaulted any woman is preposterous. We find ourselves in a world where people can make allegations, regardless of the truth and a person is left with the choice of weathering insulting publicity or engaging in multi-year lawsuits,” he fulminated. The Wynn Resorts board claimed to be shocked — shocked! — by l’affaire Steve and vowed to pursue an independent investigation. One cause to hope for real independence is that the investigative committee will be headed by former Southern Nevada Water Authority tsarina Pat Mulroy, formerly the one person in the Silver State more powerful than Wynn.

Wynn himself may not find the matter worth dignifying with a response but the Massachusetts Gaming Commission promptly launched its own probe of what it called “disturbing allegations,” adding, “The suitability and integrity of our gaming licensees is of the utmost importance, and ensuring that suitability is an active and ongoing process.” Remember, the MGC found Caesars Entertainment too mobbed-up for the Bay State. One Wall Street analyst reported that a Nevada Gaming Control Board investigation was in the works, putting new Chairwoman Becky Harris in “an unenviable seat at this juncture.”

Practically the only friends Wynn has left at the moment are in the Republican National Committee, where he serves as finance chair and even that perch looks a little shaky. Having hung Democrats on the Harvey Weinstein petard, what will the RNC do now that they have a sexual-harassment problem in their own midst? Wynn has been one of the most reliable GOP donors, with a list of beneficiaries ranging from B (Jeb Bush) to Z (Ryan Zinke). He’s shoveled money to 23 state parties, including $30,000 to Wisconsin‘s GOP. I’ll say this for Wynn: He’s generous with that $28 million he made in 2016. He gave a “george” $383,000 to the NRSC in 2o16 and seems to have had an especially soft spot for former Speaker of the House John Boehner, on whom he bestowed $52,600 in 2014.

Regardless of what direction the RNC goes, Wall Street headed one way: down. Shares of WYNN stock plunged 10% on the news. The reason for the Street’s panic is understandable. Wynn Resorts has no plan of succession in place should Steve Wynn be abducted by aliens or otherwise incapacitated. His only concrete suggestion along those lines was the cockamamie proposal that stepson Nicky “Hizzy” Hissom inherit his mantle. By contrast, if Sheldon Adelson were in a tragic scooter accident, Rob Goldstein would provide a steady hand on the tiller. Then-MGM Mirage didn’t miss a step when J. Terrence Lanni was ousted for resumé inflation (a seemingly quaint infraction these days), due to its deep executive bench.

Deutsche Bank analyst Carlo Santarelli issued a muted indictment of the company when he wrote, “Despite the reaction in shares, the majority of today’s news is not new. Reports of the settlement were present for some time, including as recently as the end of December when a Bloomberg article was published regarding it. We believe some of the reaction in shares today stems from the significant level of detail provided in the Wall St. Journal article, which in and of itself has likely created a somewhat emotional market response. We believe a substantial portion of the contents of the Wall St. Journal article were known at the Company/Board well in advance of today.” Steve Wynn is Wynn Resorts. Should he be forced to step down, what becomes of newly announced Wynn West or the company’s Japan push? How many executives out there share his appetite for risk?

Of the stock’s performance, Santarelli wrote, “We have no clear understanding of where this story will go, nor what impact it could continue to have on shares. We see clear upside in the stock over the medium to longer term, but believe this noise, and some other anecdotes (more later), could provide opportunities to acquire shares lower in the near term.” That “more later” is kind of ominous, isn’t it?

Our message to the gaming industry comes straight from Wynn’s lips, albeit in a different context: “Don’t ignore it anymore.”

* Got a few extra dollars you want to risk? The unlucky Lucky Dragon is entering foreclosure. So much for that six-month turnaround plan.