Recently in a protracted conversation with a former Nevada Gaming Control Board member, the topic of what penalties might be placed on Wynn Resorts and or Steve Wynn, should the allegations against Mr. Wynn for sexual harassment be found to have merit and validity, came up.
While a former NGCB chairman had suggested in a news article, back when the Wynn allegations received national attention, the level of fines and penalties for Mr. Wynn and Wynn Resorts could find some precedence in the actions he had taken on Cantor Gaming, the former Board member I was speaking with pointed out the circumstances are very different between the two entities.
In the case of Cantor Gaming, the company fines were for the actions of an executive that was acting independently and for his own interest, after the Board and Commission had approved that executive for an unrestricted gaming license when the Board knew the subject executive was under federal investigation, citing the company should have known what the executive was doing, even though the company was very much a victim of the rogue executive’s actions.
He further pointed out that the fines were a significant percentage of the value of the company and if such standards were applied to Wynn and Wynn Resorts, then the regulators would have expected the company to have known what Mr. Wynn was doing, if in fact he did anything at all near what was alleged. Then the fines could reach into the hundreds of millions.
Then the reality of processes, political clout and relationships kicked in. If the Nevada Gaming Control Board and Nevada Gaming Commission concluded either or both Mr. Wynn and Wynn Resorts should be subject to fines and or discipline the likely outcome would be a multi-million dollar fine and some administrative restrictions that would likely include extraordinary compliance requirements in the area of sexual harassment.
Though no company that has expansion plans wants such actions on their records or to have to revisit the topic again and again in future gaming licensing situations, like a kidney stone, overtime it will eventually pass, uncomfortably and sometimes painfully, but in the fullness of time will pass none the less into forgotten obscurity.
What To Do With Billions?
Meanwhile as a judge has released all the parties from the restrictions of a shareholder agreement that had effectively locked up the shares of Mrs. Elaine Wynn, speculations have started as to what Mrs. Wynn might do with her shares. If she were to sell at last Friday’s prices, over the time period allowed by the SEC, before federal taxes she would have roughly $1.8 billion before to work with; certainly more than enough to re-enter the gaming world at any level if she so wanted. Her nephew Andrew Pascal was a former president of Wynn Las Vegas and was set to head the Alon project prior to its land sale to Wynn Resorts. So the family, in addition to money, has the operating talent to build or buy and run about anything they would like.
Personally, prior to the acquisition of the old Frontier Hotel site, briefly known as the Alon site, by Wynn Resorts, I thought it would have been a humorous skyline looking north from the south end of the Strip, if Mrs. Wynn bought the old Frontier site and built a property titled Elaine across from the Wynn such that the skyline read Elaine Wynn.
Equal speculations are flying as to what Mr. Wynn might do with his roughly $2.1 billion. He has always been a doer, so it is likely he will do something significant. The question is really going to be what and where. Nothing says he has to stay in Las Vegas and there are many jurisdictions around the world that would gladly welcome him past his non-compete period. Since he has made money for his investors over the years, he will likely have no trouble getting all the backing he might want.
While a lot of attention has been focused on the Wynns, all the way down on the other end of the Strip, the estate of Kirk Kerkorian continues to quietly, orderly and rationally liquidate Mr. Kerkorian’s investment in MGM. If my back of the envelope math is correct and MGM’s share price continues to tick up through this time next year, then the estate will have accumulated something well north of $2 billion and probably closer to $3 billion before federal taxes since Mr. Kerkorian’s passing, virtually all of which is destined for worthwhile charities. Between his lifetime and after death charitable giving, this quiet very unassuming man will have donated something in the neighborhood of between $4 and $5 billion dollars to life changing charities and medical research.
As much as he set in motion for after his death, without seeking glory or attention for himself, Mr. Kerkorian probably put to work and kept more people at work during his lifetime than anyone else in Nevada’s history. Now that is a real legacy!