High stakes as Gaming Commission begins deliberations

Wynn lawyer says firm has ‘cleansed its character’

AS IT BEGINS DELIBERATIONS on what to do with Wynn Resorts, the Massachusetts Gaming Commission can do pretty much whatever it wants. It can declare the company unsuitable and revoke its casino license. It can fine the company. It can declare individual executives unsuitable. Or it can do nothing.

“The law provides the commission with very broad authority,” said Elaine Driscoll, the spokeswoman for the authority.

Odds are the commission will take some action, particularly in the wake of a report by agency investigators that painted a very grim portrait of a company hiding the misdeeds of its founder and former CEO Steve Wynn and tough questioning of current CEO Matt Maddox and other executives over the last three days.

Commissioner Enrique Zuniga asked Wynn Resorts board chairman Phil Satre how the company would respond if it received an adverse ruling from the Gaming Commission.

“Why would you care about that?” Satre bluntly responded, noting the Gaming Commission would effectively be severing ties with Wynn Resorts.

RELATED:

Wynn security chief spied on boss’s ex-wife

Maddox’s explanations doubted by some commissioners

Wynn CEO faces skeptical commissioners

How Steve Wynn covered his tracks

Report cites significant, repetitive failures at Wynn Resorts

Zuniga quickly amended his question to say he was asking how the company would respond if conditions were placed on its license.

“It would depend on what they are,” Satre said. “If the conditions make it impossible to succeed here, then we’d have to take it up at the board.”

Jed Nosal, an attorney with the Boston office of Brown Rudnick who represented Wynn Resorts at the hearing, told the commissioners that case law suggests a business entity has no moral character of its own. He said a business’s character is determined by its employees, and that a business can change its character by changing its personnel. He said Wynn Resorts has done that at the corporate and board level in the wake of Steve Wynn’s departure.

“We believe that Wynn Resorts has cleansed its character,” he said. Even so, he acknowledged some shortcomings. He said Maddox, a high-level corporate holdover, had admitted making mistakes.  He said the company’s initial response after the report on Steve Wynn’s sexual misconduct in the Wall Street Journal was flawed, but since then has been “strong” and “predictive of the future.”

Robert DeSalvio, president of Encore Boston Harbor, the $2.6 billion hotel and casino going up in Everett, laid out in detail what is at stake financially with the Gaming Commission’s decision.

“This is a truly unique opportunity in America where a business can change a neighborhood,” he said.

DeSalvio said Wynn Resorts is building a hotel and casino on land that was previously a “polluted mess,” while also planning the construction of an “entertainment zone” on nearby property purchased by the company. “We hope to be doing many other things in the area, either by ourselves or with partners,” he said.

He then ticked off the economic benefits that come with Encore Boston Harbor – 5,000 permanent jobs, $50 million in transportation investments, $100 million in annual vendor spend, charitable donations, and state and local tax revenues.

DeSalvio said Everett has received $30 million so far and, once the casino opens, $25.3 million a year for 15 years. Boston will receive $2 million a year for 15 years. Malden and Medford will get $1 million, Chelsea and Somerville will receive $650,000, and Cambridge will get $100,000.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The commissioners declined to comment at the end of the hearing. They are expected to begin private deliberations Friday morning and they may continue over the weekend as they try to reach consensus and craft a written decision.

“We will take our time in making a decision,” said the commission’s chair, Cathy Judd-Stein.