Wynn Resorts To Settle Securities Fraud Lawsuit For $70 Million

Ziv Chen

Last Updated: September 23, 2024 12:43 PM EDT • 1 min 60 sec read. Twitter link Google News Link

Wynn Boston Harbor as we look at the Wynn Resorts setting their lawsuit for securities and fraud allegations. — Wynn Boston Harbor. Photo by: SIPA USA.

Legal gambling for our best sports betting sites and our top real-money online casinos leads to increased scrutiny from regulators and government agencies. But this story dates to a time before the recent gambling boom.

Nevada-based casino operator Wynn Resorts has reportedly reached a settlement in a class action lawsuit accusing the company and some of its executives of securities fraud. The lawsuit claimed that the company’s failure to disclose former CEO Steve Wynn’s alleged sexual misconduct cost the company millions.

Shareholders argued that Wynn Resorts, former CEO Matthew Maddox, former CFO Stephen Cootey, and general counsel Kim Marie Sinatra misled investors by concealing these allegations, which led to “material misrepresentations” between March 28, 2016, and March 12, 2018.

The settlement totals $70 million, with $9.4 million paid by the defendants and the remainder covered by insurers. The funds will be allocated to shareholders who bought Wynn stock during the affected period and suffered consequential financial losses.

Previous payments

In 2019, the company settled a lawsuit filed by nine women who accused Steve Wynn of repeated sexual harassment at Wynn Salon and Encore Salon. The court sealed the details of that settlement, but the company separately paid $7.5 million to one of the plaintiffs.

Wynn Resorts was also fined $20 million by the Nevada Gaming Control Board in 2019 for failing to properly investigate and address the allegations against the former CEO. Steve Wynn personally paid $10 million to the Nevada Gaming Commission and has since been banned from holding any position of control in publicly traded companies overseen by the regulator.

The Massachusetts Gaming Commission also imposed a $35 million fine for the company’s failure to disclose the misconduct when applying for a gaming license in the state.

In a separate legal challenge, Wynn Las Vegas has recently agreed to pay $130 million to settle a case involving federal prosecutors in San Diego. The casino admitted to working with unlicensed money transmitters in the past, allowing gamblers to circumvent US financial laws. The settlement comes with a non-prosecution agreement, which includes specific terms Wynn must adhere to over the next two years to avoid further criminal charges.

About Wynn Resorts

Founded in 2002 by former CEO Steve Wynn, Wynn Resorts develops and operates casinos and high-end hotels in the US and China. Its properties include Wynn Las Vegas in Nevada, Encore Boston Harbor in Massachusetts, Wynn Macau, and Wynn Palace, Cotai, both in China.

It also has a plan to set up operations in New York.

The allegations against Steve Wynn forced him to step down in 2018. Craig Billings, the current CEO, was appointed in early 2022. Billings previously served as the company’s CFO, treasurer, and President.

In 2020, Wynn Resorts’ online gaming platform, Wynn Interactive, launched an online casino and sports betting app, WynnBET. However, the company recently ceased operations in several key states as it struggled to gain significant market share.

It no longer operates its sportsbook or casino platforms in Arizona, Colorado, Indiana, Louisiana, Massachusetts, New Jersey, New York, Tennessee, Virginia, and West Virginia. Now, the WynnBET Casino is limited to Michigan and operated by Caesars.

Written By:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.