Another Lawsuit, Another Disciplinary Hearing: Fallout from Wynn Accusations Continues

Earlier this month, the Nevada Gaming Control Board (NGCB) announced that it is preparing for a disciplinary hearing before the Nevada Gaming Commission (NGC) against Steve Wynn.

Wynn, the founder of the eponymous Wynn Resorts, stepped down as the company’s CEO in 2018 amid accusations of sexual misconduct. The upcoming sexual harassment hearing with the two Nevada regulatory bodies is one aspect of the ongoing fallout from that.

The announcement came on the heels of yet another lawsuit against Wynn. The plaintiff is Wynn Resorts massage therapist Brenna Schrader. Filed by attorneys Robert Eglet, Tracy Eglet, and Danielle Miller in Clark County District Court, the suit claims Wynn forced her to act as an “on-call sexual servant” during his time as CEO.

It also accuses former Wynn Resorts executive Maurice Wooden of attempting to cover up Wynn’s sexual misconduct. Schrader claims Wooden posted memorandums urging employees to support Wynn. That, the suit claims, “created an atmosphere where many employees began to call Mr. Wynn’s accusers’ sluts’ and ‘prostitutes.’”

Schrader is also one of nine plaintiffs in an ongoing federal class action lawsuit against Wynn and Wynn Resorts, which began in 2019. In this new personal suit, she alleges that Wynn Resorts continues to create a hostile work environment for her. She says that the company’s treatment of her amounts to retaliation for her attempts to seek justice against Wynn.

Is Wynn Out of the Reach of Regulators?

No date has yet been set for the hearing. Wynn, now a resident of Florida, continues to argue, as reported in the Las Vegas Review-Journal, that there’s no reason he should appear before the regulators. He argues that because he has divested himself financially from Wynn Resorts and is no longer licensed by the Nevada regulators, their rules no longer apply to him.

That evasive strategy is similar to the one he has adopted for another ongoing legal matter. That is the civil case in which the federal government seeks to compel him to register as a foreign agent. Wynn had allegedly lobbied the Trump administration in 2017 on behalf of the Chinese government.

Bonus reached out to the Nevada regulators. NGCB member Anthony Cabot is a distinguished fellow in gaming law at UNLV’s William S. Boyd School of Law. He said:

The disciplinary action against Wynn involves statutory construction. A state has the power to retain jurisdiction over persons previously granted privileged licenses. However, it must have laws in place that recognize and allow regulators to discipline a person after they have left the company and the industry. The policy issue of whether they should be able to fine a former licensed executive for accountability or deterrence purposes is different from the legal question of whether the state actually gave the regulators the power to do so.

In 2019, the Control Board cited Wynn for failing to “exercise discretion and sound judgment” to prevent incidents that might reflect on the State’s reputation. The regulators also fined Wynn Resorts $20 million due to the sexual harassment allegations against Wynn. The company then reclaimed the same amount in a settlement from Wynn as part of a lawsuit by shareholders.

And yet, despite all these civil and regulatory battles, Wynn has never been criminally tried for harassment. Meanwhile, he continues to deny all such accusations.

Wynn Resorts Wants to Distance Itself from its Namesake

Understandably, Wynn Resorts wants to move on. In response to the latest lawsuit, they told the Review-Journal that the company had revamped itself internally since the 2018 allegations. It has overhauled its board of directors and instituted new human resources policies and training.

However, Control Board Chairman Brin Gibson told Bonus:

This action against Mr. Wynn is separate and distinct from the concluded matter against Wynn Resorts, Limited. The Board maintains the Nevada Gaming Commission has full authority to decide the proposed regulatory complaint against Mr. Wynn.

What Penalty Could Steve Wynn Face from the Control Board?

The NGC is seeking a fine of up to $500,000 against Wynn. Gibson told Bonus that reaching a settlement “is always a possibility” in disciplinary matters, “but one that appears less likely in the present matter each day.”

Cabot said financial penalties such as the one previously handed down against Wynn Resorts send an important message. He told Bonus: 

A gaming company that has faced extreme scrutiny by different regulatory agencies cannot afford even an allegation of a similar nature to the previous allegations. The amount of the fines imposed on Wynn Resorts was sufficient to give clear warning to casinos that the regulators take sexual harassment seriously.

If Schrader is to be believed, however, some at Wynn Resorts didn’t get the memo. Both her lawsuit and the disciplinary hearing have the potential to drive the point home further.