Last month the Justice Department announced a lawsuit against retired Las Vegas and Macau casino mogul Steve Wynn.
The news didn’t shock the gambling community quite as much as you might expect. Wynn, after all, had already resigned as chairman and CEO of Wynn Resorts way back in 2018, following allegations of sexual misconduct.
The nature of the suit does, however, highlight the complex relationship between the U.S. and East Asian gambling markets.
At issue is Wynn allegedly lobbying the Trump administration in 2017 on behalf of the Chinese government. The DOJ claims Wynn tried to get Trump to deport a Chinese exile — a dissident not named in the lawsuit but who multiple sources have identified as businessman Guo Wengui — who was seeking asylum in the U.S. Specifically, they say Wynn relayed a request to Trump, which came from Chinese Vice Minister for Public Security Sun Lijun.
Old-school casino magnates like Wynn and the late Sheldon Adelson (founder of Las Vegas Sands) resisted online gambling. As a result, they sought to extend their empires in Asia, where China’s regressive policies on the topic were more to their liking.
Bonus spoke to Michael Green, an associate professor of history at the University of Nevada Las Vegas, about this dynamic:
Bear in mind that Steve Wynn is out of the game, so to speak. The attraction there is the market. Historically, Asian gamblers have been among the highest-rollers in Las Vegas, and when all was well in Macau, the casinos there were virtually licenses to print money for those who owned them. There also seems to be less or a different bureaucracy, with some different attitudes.
Failure To Register As A Foreign Agent
Wynn’s alleged actions, per the DOJ, violated the 1938 Foreign Agents Registration Act (FARA). This law was originally created to help root out anyone with Nazi affiliations.
According to the DOJ, Wynn should have declared himself a foreign agent, and disclosed his activities. FARA now requires that anyone who advocates, lobbies, or performs public relations work in the U.S. on behalf of a foreign government or political entity to register as such.
The department says it had advised Wynn numerous times over the last four years to register under FARA. Now, it has sued because Wynn has steadfastly refused to do so.
Currently living in Florida, Wynn spoke with a New York Times reporter just after the announcement of the lawsuit. He was brief and to the point:
Obviously, I disagreed with the Justice Department, which is why I have not registered.
(Neither of Wynn’s attorneys responded to calls from Bonus. Nor has Wynn himself.)
The DOJ’s complaint also claims that Wynn acted out of self-interest. It asserts that he was looking to safeguard his casinos in Macau.
Macau is what the Chinese government calls a Special Administrative Region (SAR), similar to Hong Kong. It’s often referred to as “The Las Vegas of the East,” because it’s one of the few places in the country where gambling is legal. In fact, its gambling industry is seven times the size of that of Las Vegas.
Quid Pro Quo
The DOJ says that Macau’s government had imposed a limit on the number of gaming tables and machines that could be operated at Wynn’s casino. Wynn was scheduled to renegotiate the company’s casino licenses in 2019. Hence, the DOJ claims, there was pressure on Wynn for a quid pro quo: Guo returned to China’s clutches in return for more favorable terms for the casinos.
It’s a plausible enough scenario.
As Green told Bonus:
China itself has not been gambling-friendly, but Macau was. Some of the crackdowns on corruption by the Chinese government affected the regulatory apparatus in Macau, and not to the pleasure of American companies located there. Given that the gaming industry has become so mainstream in the U.S., I don’t think there’s any effort by the Justice Department to crack down on it or anyone in it, generally, but the allegations against Wynn do reflect his strong relationship with officials connected to the business in Macau—they made money for him, and he made money for them.
Online Gambling Vs. Mega-Resorts
Again, this calls our attention to the philosophy of industry traditionalists like Wynn, as well as the cultural and political differences between the Western and Chinese gambling industries. The U.S. is gradually becoming more open to online gambling, and the market is growing more permissive and competitive in general. Conversely, the approach in China (and East Asia more broadly) tends to be a prohibitionist stance overall, especially online. Where retail gambling is allowed at all, it tends to be concentrated in specific places like Macau.
The situation in Macau favors companies like Sands and Wynn Resorts. These are huge, well-heeled corporations that can invest in mega-resorts in these markets where they then have to face only a few other similarly large competitors. By the same token, these behemoths lack the agility to catch up with online gambling.
Wynn, like Adelson, was very much opposed to online gambling, even though evidently a lot of people at his company were not. It was almost immediately following his departure that work began on the WynnBet app, which made its belated debut in the New Jersey online casino market in 2020.
The Plot Thickens
The DOJ further alleged that Wynn got pulled into this lobbying farrago by his fellow businessman Elliott Broidy.
This is where the story starts to become messy and weird. Up until 2019 or so, Broidy raised money for Trump and the GOP. In 2020, however, he pleaded guilty to having run an illicit lobbying campaign in an attempt to get the Trump administration to call off an investigation into the 1MDB (1Malaysia Development Berhad) scandal, as well as to have Guo deported back to China.
Elliott admitted that he had violated FARA, and pocketed $6 million for his lobbying efforts. Trump then granted Broidy a full pardon the same day he left office.
Broidy, the DOJ suit says, served as the intermediary between Wynn and Chinese Vice Minister Sun.
Sun apparently wanted Guo to be put on the national no-fly list and to have his visa denied. After Wynn supposedly told all this to Trump over dinner in June 2017, Broidy allegedly texted Wynn that President Xi Jinping personally appreciated Wynn’s help in the matter. The suit also says Wynn talked about his Macau casinos with Sun over several phone calls at that time.
In his 2020 plea, Broidy admitted to meeting with Sun. But back in 2017, a rep for Wynn’s casino company denied, in a statement to the Wall Street Journal, that Wynn had ever relayed a message to the president on behalf of China.
When The Going Gets Weird, The Weird Turn Pro
The Chinese dissident at the center of it all, Guo Wengui, has evaded extradition to date. Not only that, but he’s been thriving in the U.S.
Claiming to have made billions as a developer, Guo escaped China in 2014 during one of Xi’s anti-corruption campaigns. Despite being accused of rape, kidnapping, and bribery by the Chinese government, Guo managed to get settled in New York. Since then, he has become a thorn in China’s side, styling himself as the lone whistleblower on Chinese Communist Party (CCP) corruption.
Operating out of New York and largely on Twitter, his anti-CCP screeds earned him the wrath of Xi.
They were also embraced by Trump and eventually his former strategist, Steve Bannon. Guo even lived in Mar-a-Lago for a spell.
In 2020, Guo and Bannon announced the formation of the “New Federal State of China,” a government-in-exile aimed at overthrowing the CCP. The announcement took place in New York Harbor, in front of Guo’s $28 million yacht. Later that summer, federal agents dragged Bannon off that very same yacht, on charges of defrauding donors in a fundraiser to build a U.S.-Mexico border wall.
Doubling Down On The Anti-Wynn Accusations
As recently pointed out at Mother Jones, Guo also set up a Chinese-language video platform, GTV, and a website, GNews. GTV runs mostly a mixture of misinformation directly from Guo and clips from Bannon’s War Room. GNews presents summaries of Guo’s GTV clips.
Together, they’re an echo chamber rife with falsehoods and paranoia. This includes some anti-Wynn nuggets which came from Guo both before and right after the DOJ lawsuit:
Steve Wynn case opened a new chapter in the Whistleblowers Movement . . . the validation of serious corruption of the U.S. political, business and judicial communities by the CCP.
Death occurred almost daily in Wynn Macau’s casinos. . . . At the peak, ten people jumped off buildings a day at Wynn Macau’s casinos.
Here’s an older one from November 2021:
How did China win the chance to host the Beijing Olympics? Jiang Zemin colluded with the American casino tycoon Steve Wynn, gambling license in Macau for the Olympics in China.
There’s also a GNews transcription of an interview with Guo on Bannon’s War Room on May 25. Referring to Guo by one of his pseudonyms, “Miles Kwok,” Bannon stated:
Wynn is also doing many other jobs for the CCP. Wynn uses text messages and emails to discuss matters with top cadre of the CCP, including Wang Qishan and people close to Xi. These people are not just a small gang, this is huge power.
The transcript has Bannon finishing off his interview with one more dig at Wynn:
Look at the pressure on Wynn, these people are constantly trying to repatriate Miles. Wynn is cooperating with a transnational criminal organization to destroy America, Wynn is not only the threat of the Chinese people, he is also a threat to American people.
On the surface, Wynn’s situation seems purely political and has no bearing on the gambling world since his removal from the company he founded. That view may not be entirely accurate, however.
True, he no longer runs any casinos, but the former chair of the Republican National Committee is still a GOP megadonor. Federal Republicans are, by and large, opponents of regulated online gambling.
In 2020, Wynn and his wife Andrea donated $1.5 million to Donald Trump’s presidential campaign. He alone pumped another $5 million into the coffers of the two Georgia Republican candidates vying in runoffs for the U.S. Senate.
As for Guo, though he has been successful in avoiding deportation, he declared bankruptcy in February.
The CCP has expelled Sun Lijun from the party and removed him from public office. He now faces prosecution for taking bribes, manipulating the stock market, and illegally possessing guns.
Wynn, of course, remains a billionaire, despite no longer being involved with his former company. Not only that, but just two weeks after the DOJ lawsuit hit, Los Angeles attorney Lisa Bloom retracted claims she’d made in March 2018, relating to Wynn’s alleged sexual misconduct.
Despite possible fallout from the lawsuit, Green, for one, remains realistic about the prospect of more Wynn casinos in Macau:
If the market is there and the support is there, I have no doubt they will. With Wynn out, the company has some breathing room, although the accusation is that he did this while he still was connected to Wynn Resorts. I don’t expect this to have a major impact on the industry as a whole, except to remind them to be cautious: They are a multinational business dealing with a variety of governments and regulations.