In recent years, the Wynn Resorts scandal involving its former CEO and founder, Steven Wynn, has been a topic of significant interest and concern in the business world. The scandal rocked the casino and resort company, leading to multiple lawsuits, fines, and a significant drop in stock prices. In this blog, we will discuss the Steven Wynn scandal, its impact on the company, and the current state of Wynn Resorts.
Steven Wynn Scandal
Steven Wynn, the founder and former CEO of Wynn Resorts, faced multiple allegations of sexual misconduct in 2018. The Wall Street Journal published an article in January 2018, in which it detailed several allegations of sexual misconduct against Wynn by former employees. The article stated that Wynn had paid $7.5 million in 2005 to settle a lawsuit filed by a former employee who accused him of forcing her to have sex with him. The article also included other allegations of harassment and misconduct by Wynn towards his female employees.
In response to the allegations, Wynn resigned as CEO and Chairman of Wynn Resorts in February 2018, denying all the allegations made against him. The scandal caused a significant drop in Wynn Resorts’ stock prices and led to multiple lawsuits and investigations.
Impact on Wynn Resorts
The Steven Wynn scandal had a severe impact on Wynn Resorts. The company’s stock prices dropped significantly in the aftermath of the scandal, with a 20% decrease in the first two months following the publication of the Wall Street Journal article. The scandal also led to a decline in revenue, as some customers boycotted the company and canceled their reservations.
The scandal also resulted in multiple lawsuits against Wynn Resorts. In March 2018, the Massachusetts Gaming Commission launched an investigation into Wynn Resorts’ suitability to hold a casino license in the state. The investigation found that the company had failed to disclose allegations of sexual misconduct against Wynn during the license application process, which led to a $35 million fine for Wynn Resorts.
The scandal also led to a lawsuit filed by shareholders against Wynn Resorts, alleging that the company’s board of directors had failed to investigate and disclose Wynn’s alleged misconduct. The lawsuit was settled in November 2019, with Wynn Resorts agreeing to pay $41 million to the shareholders.
Current State of Wynn Resorts
Wynn Resorts has taken several steps to address the fallout from the Steven Wynn scandal. The company has appointed a new CEO, Matt Maddox, who took over from Wynn in February 2018. Maddox has implemented several changes aimed at improving the company’s corporate governance and culture, including the establishment of a new Code of Conduct and Ethics, and the creation of a new Executive Leadership Team.
The company has also taken steps to improve its relationships with its customers and employees. In response to the allegations of sexual misconduct, Wynn Resorts created a new position of Chief Sustainability Officer, responsible for ensuring that the company operates in an ethical and sustainable manner. The company has also established a Diversity, Equity, and Inclusion Council, aimed at promoting diversity and inclusion within the company.
Wynn Resorts has also been expanding its operations. The company opened its fourth resort in Macau, China, in August 2018, and is planning to open a new resort in the Boston area in 2022. The company has also been investing in digital gaming, with the launch of its online sports betting platform in New Jersey in 2020.
Conclusion
The Steven Wynn scandal was a significant blow to Wynn Resorts, leading to a drop in stock prices, a decline in revenue, and multiple lawsuits. However, the company has taken several steps to address the fallout from the scandal, including the appointment of a new CEO, the implementation of new corporate governance and culture.
