Massachusetts Regulators to Investigate Casino Mogul

BOSTON — The Massachusetts Gaming Commission, stunned by allegations that casino mogul Stephen Wynn had engaged in decades of sexual misconduct, vowed Wednesday to conduct an investigation into Wynn, who is in the midst of building a $2.4 billion luxury casino resort outside Boston.

The gaming commission has broad authority to exercise a range of options, including levying a fine or even revoking Wynn’s license to operate the casino.

The project, called Wynn Boston Harbor, is the largest single-phase development in state history and is scheduled to open next year. Thousands of jobs are associated with the project, which is a crucial part of the fledgling casino industry in Massachusetts.

The Wall Street Journal reported last week that Wynn, one of the most powerful figures in the casino industry, had engaged in serious sexual misconduct, including exposing himself, pressuring employees for sex and paying $7.5 million to a former manicurist who said that Wynn had forced her to have sex with him. Wynn has denied the allegations.

On Tuesday, the chairwoman of the Nevada Gaming Control Board said her panel was investigating the allegations. And board members of Wynn Resorts Ltd., of which Wynn is chairman and chief executive, said they had formed a special committee to look into the claims.

As part of the process of granting Wynn a license to operate a casino, the Massachusetts commission conducted an extensive review of Wynn and his corporate empire. Investigators, who usually focus on an individual’s criminal history and potential ties to organized crime, did not report that Wynn had been the subject of any sexual misconduct allegations and determined that he met the state’s “suitability” standard.

The chief question before the commission on Wednesday was how its investigators could have overlooked the allegations against Wynn, which had been confirmed to The Journal by dozens of people. Wynn Resorts told The Journal in a statement that the application process did not ask for disclosure of that type of information.

The director of the commission’s investigations and enforcement bureau, Karen Wells, told the commissioners that lawyers for Wynn Resorts had confirmed to her the existence of the $7.5 million settlement reported by The Journal and that it had not been disclosed to anyone or mentioned in court documents.

“This was a private agreement and steps were taken to keep it from the public domain,” Wells said.

She said her team would conduct a further review — including a look at Wynn’s suitability and who knew what, when, and what they did about it. Wells said she could not speculate about how long her investigation might take, but the commissioners urged her to conduct it quickly while maintaining fairness and transparency.

No representatives from Wynn Resorts spoke at the meeting. In a statement, the company said it would fully cooperate with the commission’s investigation. “Our construction is on schedule for a 2019 opening and continues to create more than 4,000 local union trade jobs,” the company said.

Steve Crosby, the commission chairman, told reporters that the commission had already begun a review of its investigative procedure, but added that he had “enormous confidence” in the commission’s investigators.

He said the purpose of the meeting on Wednesday, which lasted less than an hour, was to determine the significance “of these appalling accusations on the suitability status of Mr. Wynn” and other principals in the Wynn organization, and to “ensure public confidence in the integrity of the gaming licensing process.”

Pressed by reporters as to whether the commission might revoke Wynn’s license or shut down the project just north of Boston in Everett, Crosby said: “We have unlimited authority to do virtually anything that we want, once we know what the facts are.”

He said he did not want to speculate about what might happen. “But for the time being, everybody who’s got jobs in Everett should go about their business and feel fine,” he said. “This is not the first time that there have been allegations of misconduct against major players in the casino business.”