Steve Wynn resigns as head of his company after sexual misconduct allegations

Steve Wynn resigns as head of his company after sexual misconduct allegations

Steve Wynn resigns as head of his company after sexual misconduct allegations

Steve Wynn, a developer and owner of luxury hotels and casinos, resigned yesterday as CEO of Wynn Resorts amid accusations of sexual misconduct that began circulating in January.

Shares in Wynn Resorts, which owns the Wynn, Encore Las Vegas casinos as well as its Wynn Macau unit, have tumbled almost 20 per cent since the Journal report on Jan 26.

Wynn Macau's permit is up for renewal in 2022, and Macau regulators are preparing to outline the process for casino-license bidding later this year. JPMorgan Chase & Co. upgraded its rating on the stock, while Roth Capital's David Bain slashed his recommendation, saying that the "Steve Wynn valuation premium" will take years to recoup.

"It takes off the pressure as far as Macau is concerned", said Pedro Cortes, a senior partner with the Macau law firm Rato, Ling, Lei & Cortes. Wynn has denied any wrongdoing, calling the allegations "preposterous". Taking over the CEO position is current President Matt Maddox.

Wynn, in his own statement Tuesday night, said he was buried by an "avalanche of negative publicity".

The Nevada Gaming Control Board said in a statement Wednesday that it plans to "continue with its investigation".

"Macau's regulator has emphasized it needs to make sure if the key persons of casino operators are suitable", said David Bonnet, partner at Delta State Holdings Ltd.

In announcing Wynn's resignation, the company's board of directors made clear it had done so "reluctantly".

"We continue to believe that Mr. Wynn's quintessential strength lies in his resort design abilities", said Gabelli & Co analyst Adam Trivison. The company's shared jumped $12.25, or 7.5 percent, to $175.47 on Wednesday afternoon following Wynn's resignation.

Shares of Wynn Resorts plummeted last week when the report broke. The suit seeks redress from the injury and losses sustained by the company as a result of Wynn's actions.

"They will have to relook at rebranding to something that sounds very similar to what it now is", said Ben Lee, a Macau-based managing partner at Asian gaming consultancy IGamiX. Wynn, a close ally of Trump, said at the time. The company will continue to fully focus on its operations at Wynn Macau, Wynn Palace and Wynn Las Vegas; the development and opening of the first phase of Wynn Paradise Park, now under construction on the former Wynn golf course; as well as the construction of Wynn Boston Harbor, which will open in June 2019.

Though a new CEO was swiftly named, many questions remain.

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