The Massachusetts Gaming Commission last week voted to remove Steve Wynn’s name from the license of the $2.5 billion casino his former company is building along the Mystic River overlooking Boston.
In its eight-page written order the commission said Wynn “can no longer exercise control or provide direction to Wynn MA, LLC or Wynn Resorts Ltd. in either of those capacities as a matter of law.” It added that there was “substantial evidence that the relationship between Mr. Wynn and Wynn Resorts has been terminated in a meaningful way such that Mr. Wynn no longer falls within the definition of qualifier at the conclusion of the upcoming annual shareholders meeting.” That meeting will happen May 16.
Wynn, who founded and led the company for 15 years, had in February resigned as chairman and chief executive officer and divested himself of all financial interests in the company in the wake of a sexual misconduct scandal that involved a $7.5 million payment by him to a massage therapist who claimed he raped her, as well as numerous other allegations—all of which he denied and continues to deny.
The removal of his name from the license signals a concession by the MGC that it is dealing with a different casino company than the one that its investigators have strenuously targeted since the Wall Street Journal report in January brought the Wynn accusations to light. But that doesn’t mean the investigation into the company’s continued fitness to operate a casino in the Bay State does not go forward.
Wynn and the company had requested that his name be removed as a “qualifier” for the casino. The commission’s legal definition of a “qualifier” is someone who has a “professional interest in a gaming license.”
As another signal that the company has completely severed ties with its founder, Wynn has renamed the Wynn Boston Harbor as the Encore Boston Harbor.
At the April 27 hearing previous to the ruling the new Wynn Resorts CEO Matt Maddox made a point of contrasting his style with that of the flamboyant Wynn, especially emphasizing his own small-town Arkansas origins and a man who is moving the company towards family values and sexual equality.
When one of the commissions, Gayle Cameron expressed skepticism about the company’s true motives in adding three new women to its board of directors, Maddox emphasized that he is from a new generation of leaders.
Cameron first observed that the women were “eminently qualified” to serve on the board but that they had been qualified five years ago. “I just have to make the point that there’s an issue around women, and now women are more valuable to the board. I see what you’re doing, but it just seems to me the company as a whole didn’t value women until they got in trouble at the Board level.”
Maddox replied that he was 42-year-old father, with two daughters and a son. “If you think for one second that I want my 10-year-old son to have any additional benefits or a better environment in the workplace than my daughters, that’s not true. I am part of the generation that believes this. I’m part of the generation that’s driving this. So, I don’t think it’s anything about what the company did do or didn’t do. Crisis sometimes creates opportunity. You can let crisis drive you down or you can take it and make something great out of it. That’s what I’m committed to do.”
Later Maddox suggested that reporters look at his entire career before deciding if he should be trusted to carry out this pledge. “Check with anyone I worked with at Bank of America or Caesar’s Entertainment. For people who have work with me while I’ve been at this company 16 years, you are going to hear that I do what I say. I’m a small-town kid from Arkansas. I grew up in a place where family and community values matter. It’s who I am and I would challenge anyone to come out and say that’s not who Matt Maddox is.”
During that same hearing Wynn attorneys provided large quantities of documents to buttress the contention that the founder is no longer connected with the company.
However, the commission was also keenly interested in whether Wynn’s influence lingers on, even though he himself does not. In other words, has the culture of the casino giant changed. That prompted Maddox’s 45-minute testimony about the actions he has taken since becoming head of the company.
He first held extensive meetings with employees around the world to shore up their confidence and launched a new campaign dubbed “We Are Wynn” to emphasize that the changes were not simply window dressing.
New banners have gone up at the construction site of the new Encore Boston Harbor, with pictures of employees displayed. Maddox’s picture is shown too, but no larger than the others. It is labeled simply as “leader.”
Maddox said, “I reminded them this company is not about a man and hasn’t been for 18 years. Steve Wynn is not Wynn Resorts. Wynn Resorts is about 25,000 employees and the people who grow this company every day…That’s what it represents.”
He also took actions to settle billions of dollars of litigation between the company and Universal Entertainment of Japan. These lawsuits were really personal disputes between Wynn himself and the other founder of the company.
Maddox settled the litigation for $2.4 billion. Then he persuaded the founder to sell his 12 million shares, which represented 13 percent of the company, not on the open market, but to handpicked investors, Capital Research, Galaxy Entertainment of China and T. Rowe Price, “so the company could have strong shareholders.”
He told the commission that while it may not seem like change is happening fast enough, “they’re moving at lightning speed.” The company
The additions of the three women to the board will be followed by other changes, Maddox and Legal Counsel Kim Sinatra promised. “The idea is to make an orderly transition. This is about as much as a publicly traded company can take at one swath,” said Sinatra.
To prevent Wynn from exerting influence at a distance, a new company policy request senior management and board members to report any contact they have with the former CEO in writing.
The company has also initiated a Culture and Diversity Department and brought on a third party to conduct sexual harassment training.
The commission did not issue a ruling on whether the company is suitable to operate a casino in Massachusetts after Maddox spoke. It is expected to do so by the summer.
Wynn Resorts is also under investigation by the Nevada equivalent of the commission.
Rather than focusing on the change in the company’s culture, investigators seek to know if executives were aware of Wynn’s misconduct at the time the company was seeking to qualify for a license to operate the Boston metro casino.
The commission could, if it chooses, revoke the license.
Because of the investigation and the possibility that it might lose the license, Wynn has been in contact with other companies, including MGM Resorts International, about selling the Everett property.
Maddox has admitted to the commission that these talks are taking place. He says Wynn wants to remain in the Boston market, but might sell if the commission rules against it.
Meanwhile, the casino, under construction in Everett, is moving toward a June 2019 opening.
With the $960 million MGM Springfield due to have its grand opening August 23, the casino has started rising signs by crane. The first read “Hotel” and included the MGM lion logo.” It was installed along Main Street.
This was followed by another sign on the rotunda of the hotel and included the MGM name mated with Springfield.
The casino will have 2,500 slots, 94 gaming tables, 23 poker tables, a spa, dining, cinema, bowling alley and rooftop garden.
To prepare for the opening MGM is hiring 3,000 employees, of which two thirds will be fulltime with benefits.
General Manager Alex Dixon says that they look for friendly people. At a recent job conference, he remarked, “One thing that never fades is a smile. And that’s the first thing that we look for when people walk through our doors looking to get hired.”
He noted that the casino is “pursuing our best effort” to hire more than a third of those from Springfield. Dixon was the keynoter at the Commonwealth Workforce Coalition annual conference. He said, “We can teach you how to deal cards, we can teach you how to make sure that you can construct a building and make sure it’s set, we can teach you how to pour a drink, but we cannot teach you how to smile.”
Urging friendly people to apply for casino jobs, Dixon said, “You’re going to walk in and you’re going to see the beautiful chandeliers, carpet underneath, the table games, the spa, the hotel, the food and beverage outlets. But none of it matters. None of it matters if we don’t have the right people in that spa, in security.”
MGM Springfield also hosted its first large-scale job fair last week at the MassMutual Center a few blocks for the casino. The event was by invitation. About 700 Job seekers were able to complete the hiring process and get an official welcome. Most still need to undergo background checks, drug screenings and in some cases obtain a license from the Massachusetts Gaming Commission. Most of the positions were for security employees, food and beverage workers and cage workers. Dealers are hired through a separate process.
Another, larger hiring event will be held in June at which time 1,500 potential employees will be invited, with about half expected to be office jobs, according to Mirikate Murren, vice president of human resources.
“The call to action here is to apply,” she said. “Apply for a position with us, and that begins the process.”
Despite an economic resurgence for most of the nation, Springfield still has a 6.5 percent unemployment rate.
The city has been working with a consultant on how to utilize the investment MGM is making to spark a renaissance downtown.
Recently city council members, city planners and casino officials met with the consultant who prepared the report “An Economic Development Strategy — The Renaissance of a Great American Downtown,” to discuss how to bring new developments to downtown, to help make Springfield a center for conventions, meetings and entertainment and to partner with companies and civic organizations to bring more accessible housing to the downtown. All while attracting more businesses and employees.
It seeks to “to try and capitalize on and leverage this large economic development project (MGM) through key economic strategies.”
The city and MGM split the $200,000 cost of the report, which offers a blueprint and action plan, which was developed by Chicago Consultants Studio.
Kevin Kennedy, Springfield’s chief development officer, told the group, “The area around the casino cannot be neglected,” adding, “We are planning to look at different strategies that will help everybody in the area surrounding the casino.”
City officials are painfully aware of and point to blighted parts of town and properties near the casino.
With the casino’s opening pending some tourism groups in the Berkshires, i.e. Western Massachusetts, are hoping to forge regional partnerships.
An estimated 9 million adults live within a 90-minute drive of Springfield. MGM has committed to spending $50 million with local vendors, to hold events near the city and partner with area tourism groups.
On the other hand, some area nonprofit performing arts centers worry that their sales could be hurt by the casino’s ability to spend more to book talent. The Mahaiwe Performing Arts Center in Great Barrington, while not noticing a decline in sales yet, is concerned that the casino could dry up its access to available artists.
The casino’s General Manager Alex Dixon believes that the whole region will benefit from the added activity level.
“From a player development or high-end guests standpoint, there are so many amenities within Berkshire County,” Dixon told the Berkshire Eagle. “It’s an opportunity for us to showcase what is great about Western Massachusetts.”
According to Dixon, most of the $50 million that the casino committed to spend locally is still being sought or negotiated. He could confirm that contracts with Berkshire Mountain Distillers in Sheffield and Berkshire Brewing Co. have been finalized. He said the casino’s food and beverage director has been working with these companies for some time.
MGM expects to hire about 3,000 fulltime employees and is well on its way to hiring them. Even though the Berkshires is half hour’s drive from the MGM, 160 people from that area have submitted applications.
Dixon said, “We’re thrilled about having that already in the queue and we’re still months away from fleshing out the whole team. Our jobs message is reaching out to Berkshire County … and we’re encouraged on that front.”
Southern Berkshire Chamber of Commerce Executive Director Betsy Andrus said she doesn’t believe that many people from the county will end up working at the casino because of the long commute.
The Massachusetts Cultural Council will get 2 percent of the taxes generated by all of the Bay State’s casinos or about $4 million annually. It will be making grants to help nonprofit arts groups and municipally owned venues impacted by gaming.
Executive Director Anita Walker told the Eagle, “There’s a strong feeling that [performing art centers will] feel the negative impact quickly. There will be a lot of excitement and enthusiasm; I’m sure the casinos are already booking, and arts centers are already facing that competition, I imagine.”
These grants could begin as early as this winter, although no official start date has been announced. “Rather than waiting for a whole year then distributing the money the following year — we wouldn’t want to wait much longer than six months,” said Walker.
Springfield’s License Commission last week approved two package store licenses that will allow the casino to sell bottles of wine and beer at the casino hotel and at a restaurant opening there: the Cal Mare. The latter is unheard of in Massachusetts.
Commission Chairman Peter Sygnator remarked on this last week. “The retail package store license for the Cal Mare Restaurant is very unique and I am looking forward to seeing the selections of wines offered by MGM.”
MGM Springfield spokesman Saverio Mancini commented, “The vision of incorporating Main Street store fronts into our resort allows us to naturally blend with the unique existing, historic atmosphere that is so important to the community.” He added, “Building in a high-end wine shop as an element of our Cal Mare restaurant creates an amenity that can be enjoyed by our guests, as well as Main Street visitors, business people, and residents.”
The Cal Mare plans to offer high-end wines, ranging from $50 to $900. The license allows customers to buy wines and take them with them. The Cal Mare will be operated by celebrity chef Michael Mina, and will feature coastal Italian cuisine.