Wynn Resorts fined $35M for mishandling sexual misconduct complaint

The Commission also assessed a personal fine of $500,000 on Wynn CEO Matthew Maddox, due in part to his failure to require an investigation about an employee complaint brought to his attention.

The extensive 54-page decision arises out of the Commission’s year-long investigation into allegations of sexual assault, misconduct and other inappropriate behavior and the handling of those allegations by the company.

“Ensuring public confidence in the integrity of the gaming industry and the strict oversight of the gaming establishments through rigorous regulation is our principal objective,” Commission Chair Cathy Judd-Stein said in a statement. “Our licensees will be held to the highest standards of compliance, including an obligation to maintain their integrity.”

According to the decision, the five-member Commission identified “numerous violations of controlling statutes and regulations largely pertaining to a pervasive failure to properly investigate in accordance with existing policies and procedures and to notify the Commission about certain allegations of wrongdoing.”

After “lengthy deliberations,” the commissioners concluded that Wynn Resorts can keep its license in Massachusetts. Although the Commission found a “lack of substantial evidence to disrupt the licensee’s suitability status,” the commissioners said they were “profoundly disturbed by repeated systemic failures and pervasive culture of non-disclosure presented in the [Investigation and Enforcement Bureau] report and adjudicatory hearing.”

“Specifically, the corporate culture of the founder-led organization led to disparate treatment of the CEO in ways that left the most vulnerable at grave risk,” reads the commissioners’ decision. “While the company has made great strides in altering that system, this Commission remains concerned by the past failures and deficiencies.”

Compliance conditions

To help ensure future compliance and to punish for past transgressions, the Commission has imposed the following penalties and conditions, in addition to the $35 million fine:

• Wynn Resorts shall maintain the separation of chair and CEO for at least the term of the license (15 years).
• At Wynn’s expense, the Commission, as more fully described in the decision, will select an independent monitor to conduct a full review and evaluation of all policies and organizational changes adopted by the company.
• The board of directors shall provide the Commission timely reports of all directors’ attendance records of both board and assigned committee meetings.
• Wynn must train all new employees on the Preventing Harassment and Discrimination Policy within three months of opening.
• Any civil or criminal complaints or other actions filed in any court or administrative tribunal against a qualifier shall be reported to the Commission immediately upon notice of the action.

The Commission’s decision also calls on the board of directors to engage an executive coach and any additional necessary resources to provide coaching and training to Maddox focused on, but not limited to:

• Leadership development;
• Effective and appropriate communication for internal company-wide reporting and messaging;
• Enhanced sensitivity to and awareness of human resource issues arising in complex workplace environments that, without limitation, relate to diversity (including disability), implicit bias, hostile work environments, inherent coercion, sexual harassment and assault, human trafficking, and domestic violence; and
• Team building and meaningful collaboration.

The commissioners concluded that one of the key metrics by which it will measure the success of Wynn’s gaming establishment in Massachusetts will be “the overall well-being, safety, and welfare of the employees,” said the commissioners in the decision. “A second but equally important metric is the importance of compliance and communication with the regulator. This penalty is designed to guarantee these practices.”