Wynn Resorts is reportedly in negotiation to possibly sell the casino complex it’s building in Everett to competing casino company MGM Resorts.
The negotiations were first reported by the Wall Street Journal.
Any sale to MGM would face significant obstacles, perhaps most importantly that MGM is set to soon open its own resort casino in Springfield. The 2011 law that authorized casino gambling in Massachusetts says that “no person or affiliate shall be awarded, purchase or otherwise hold or have a financial interest in more than 1 gaming license issued by the [state's gaming] commission.”
MGM, which might consider the Boston market to be more lucrative, could choose to sell the Springfield casino, but that would require the state Gaming Commission to approve a new operator in Springfield, as well as the transfer of the Everett license.
“Basically it's a casino license shuffle,” says Paul Debole, an assistant professor of political science at Lasell College, whose focus includes casino gambling. “I think this Gaming Commission would look at any reasonable request, but it does seem to be an uphill battle that MGM would have to fight.”
Or there could be a change in the law.
“The other thing the Massachusetts Gaming Commission could do would be potentially to revisit the law and go back to the legislature and say, ‘All right, we've got some unforeseen circumstances here,’” says Patrick Kelly, a business professor at Providence College who has studied casino gambling. “And if they deem that MGM would be a good operator of more than one casino, and that is the best way to proceed, maybe they could do that,” Kelly says. “Whether the legislature would be cooperative remains to be seen.”
Debole is skeptical that would happen. He says the legislature has been reluctant to revisit the gaming statute "unless it's absolutely necessary, and I just can't foresee the legislature actually spending the time to carve out this exception.”
The Massachusetts Gaming Commission is currently investigating sexual assault allegations against Wynn Resorts’ founder, Steve Wynn, who has now left the company and sold his stock in it. The Commission wants to know why Wynn Resorts didn’t disclose a $7.5 million settlement Steve Wynn made with a former employee who accused him of sexual assault. The inquiry is also looking into whether other Wynn executives knew about the allegations and the settlement, and when. Kelly thinks that might be motivating Wynn Resorts to consider a sale now.
“What looms potentially large, depending on what this investigation shows, is that the Massachusetts Gaming Commission could potentially revoke the Wynn license,” Kelly says. And if that were to happen, Kelly believes it would greatly diminish the value of the Everett property.
“If I was a gaming operator and [Gaming Commission Chair] Steve Crosby told me that I'm proceeding at my own peril, I would really have to take a look at what I was working on, and the way that the investigation was going,” Debole says.
The sexual abuse allegations and the $7.5 million settlement were first uncovered by the Wall Street Journal in January. In addition to the Massachusetts inquiry, regulators in Nevada are also looking into the matter.
“The scrutiny they're facing in Massachusetts is sort of the most extreme,” says Chris Kirkham, who's on the Wall Street Journal's reporting team that's investigating Steve Wynn and his company. “And it also has the potential to affect how things play out in other jurisdictions like Nevada or even potentially in Macau, because Massachusetts appears to be the most public about this.”
At its meeting Thursday, the Gaming Commission agreed to consider a request to remove Steve Wynn from the license of the Everett casino. That request came from Steve Wynn himself and the Wynn company.
Governor Charlie Baker said Thursday he supports that move. “While he’s no longer a stock holder, he’s no longer chairman of the board, he’s no longer involved in the company, I would think removing his name from the license would make sense,” Baker said.
But on that same day, Crosby said the Gaming Commission will look more deeply than that. "We have a broad responsibility to keep an eye out on anybody who might have any influence,” Crosby said. “So it's not just checking boxes. Did he sell his stock? Does he have a position? It also goes to does he have any residual influence, for example.”
As for a potential sale of the Everett casino, Crosby has refused to comment on the matter, saying he has no inside information. In the meantime, the Commission's investigation into the allegations against Wynn and what others at the company knew about them is ongoing.