Wynn Resorts Has MGC Approval to Submit Application

December 31, 2013
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Wynn Resorts that will be located on Route 99 less than a quarter mile from the Charlestown line  has cleared all hurdles with the Massachusetts Gaming Commission (MGC) after a unanimous vote recorded last Friday, Dec. 27, by Commissioners that officially declared the company suitable to submit a Phase 2 application.

Earlier this month, the MGC’s investigation unit had unveiled a lengthy investigative report on Wynn and the MGC held a protracted hearing discussing that report. Though several issues arose – including business conduct practices in Macau, China, and a shadowy land ownership situation on the Everett property – investigators recommended Wynn be given a positive review.

That happened last Friday, when after much deliberation, the MGC gave its stamp of approval.

“On the whole, it is clear from the report that the applicant has created a dynamic within its company that promotes strict regulatory compliance,” read the MGC report. “The [investigators] recommendation that the applicant be issued a positive determination of suitability is subject only to the condition that the applicant demonstrate at the hearing that it engages in responsible business practices in Macau. For the reasons articulated below, we find that it has. In addition, the applicant clearly and convincingly demonstrated that it had dealt in a satisfactory manner with three other issues…In sum and for the following reasons, the Commission finds that the evidence collectively demonstrates that the applicant has met its burden of proving its qualification for licensure by clear and convincing evidence.”

Mayor Carlo DeMaria said he was not surprised by the vote, and said owner Steve Wynn has been a great partner to work with.

“It is no surprise to me that Wynn Resorts has been found suitable to hold a gaming license by the Massachusetts Gaming Commission,” he said last week. “From my first conversation with Mr. Wynn and his team, I knew I was dealing with a leader in the industry and a great partner for the City of Everett. Together, we will continue to lead the way in bringing a world-class project to the region and all the benefits that come with it. I look forward to the next phase of the application process and showing the Commission and the people of Massachusetts that Wynn Everett is the best bet for the Commonwealth.”

One of the biggest issues for the Commission was the business practices of the Wynn Macau resort, and how Wynn relates to promoters in that Chinese jurisdiction. In Macau, licensed promoters work with casinos to bring in customers on what is known as  “subjunkets.”

That industry is known to be wrought with shady operators and occasional violence and intimidation – as well as other nefarious activities like money laundering. However, MGC investigators found that Wynn Macau conducts its operations with promoters in a very upright manner, running background checks and providing extensive anti-fraud training for employees.

“Wynn Macau’s strict compliance with both its own corporate compliance standards as well as existing Macanese law satisfy the Commission that concerns surrounding the subjunkets are being adequately mitigated,” read the report.

A second issue for the MGC was the land deal in Everett, for which at least two convicted felons were believed to have silent ownerships in a company that owns the land – and from which Wynn Resorts has an option agreement upon. In an earlier hearing this month, and in last week’s vote, it was agreed that the situation was not known to Wynn and that, once the company found out, they mitigated it sufficiently.

The final issue detailed was a relationship with a former member of the company’s Board of Directors, Kazuo Okada. Several pending lawsuits involving that individual spin around allegations that the Japanese billionaires’ company engaged in bribery while conducting business in the Philippines. Okada has been removed from the Board and there is a civil lawsuit ongoing between him and Wynn.

The positive finding and unanimous vote are conditional upon two things – that Wynn provide in a timely manner documents about Macau to the MGC and that the company must provide the MGC with notice of any change to its corporate governance structure.

Wynn Resorts must now submit its full Phase 2 application – including the positive results of a June referendum vote – to the MGC by today, Dec. 31.