How Massachusetts Went All in on Steve Wynn
The Massachusetts Gaming Commission was determined to set up a squeaky-clean casino biz. But when Steve Wynn offered to build a jackpot outside of Boston, the only question became how quickly they could bend their own rules.
On a gray rainy day last September, Massachusetts Gaming Commission chairman Steve Crosby sat down to write his resignation letter, already deeply mired in scandal. It started when Steve Wynn, the billionaire septuagenarian whom Crosby’s commission had hand-selected to build a five-star casino on the banks of the Mystic River, was accused of sexual misconduct. Ever since, Crosby and his commission had been under siege for granting Wynn a casino license in the first place. Now, charges of incompetence, favoritism, and outright rule-breaking echoed throughout the state’s corridors of power.
Crosby’s rise to prominence had been slow yet impressive. A centrist Republican and longtime public servant, he climbed his way to becoming state budget chief and then a dean at UMass Boston. Over time, he earned a reputation as an honest pragmatist respected on both sides of the political aisle. In 2011, after signing a law that essentially created a local casino industry, then-Governor Deval Patrick promptly appointed Crosby as chairman of the newly formed gaming commission. The choice was widely praised. “He knew politics,” says former state Senate President Stan Rosenberg, “and he had a very solid reputation for integrity.”
From the start, Crosby’s mandate as MGC chair had been clear: Build a multibillion-dollar casino industry free of the faintest whiff of criminality or corruption. This, after all, was Massachusetts, where Puritans first landed on Plymouth Rock, not some seedy back-alley canton like New Jersey or Nevada. Still, the casino law’s and the new commission’s insistences on Boy Scout standards struck some as quixotic. (When has the casino industry ever been squeaky clean?) “It’s about as impossible as any position I’ve seen in public service,” former Lieutenant Governor Donald Dwight said at the time. “The odds of him being 100 percent successful—whatever the definition of success—are pretty long.” But Crosby, a man supremely confident in his own abilities, was game. “I like big challenges. I like having an impact,” he told the press. “I’d rather have me making a lot of these decisions than others.”
At 73, Crosby has a round, meaty head topped with sprouts of closely cropped gray hair. With a stocky, powerful build, he still possesses the can-do attitude from his years as an undersize Harvard lineman, known for busting his ass during practice despite hardly ever getting in the game. An impeccable dresser, he is rarely seen without his rimless spectacles and starched French cuffs—a signature of Crosby’s wardrobe that reveals, at heart, that he’s more businessman than bureaucrat.
At first, Crosby appeared to have managed the impossible. He boasted about the thoroughness of his commission’s vetting process and kicked unsavory operators out of the state when they failed to meet the MGC’s stringent “suitability standards.” His investigators, for instance, discovered that the president of one gaming company, which had hoped to build a slot-machine parlor, had been taking money from his company’s money room, and that another operator, applying to build a casino, had purported ties to Russian organized crime. At the same time, Crosby also convinced world-class companies, including Wynn Resorts, to invest billions in five-star casinos that would make the state proud. (Wynn Resorts declined to comment, however, their lawyers did send some responses after the print story went to press; Crosby declined an interview.)
Drowning out Crosby’s success, though, was the steady drumbeat of troubling discoveries and subsequent decisions that led to his downfall. As time would soon reveal, there was a reputed Mafia associate tied to the toxic-waste-contaminated land where Wynn was building his casino, as well as questions about Wynn’s dealings and connections in Macau, the Chinese gambling enclave where his company made most of its profits. Then, in January, dozens of Wynn’s employees accused him of a decades-long pattern of sexual misconduct and claimed that his company had covered for him, Catholic Church–style. Day after day, as Wynn’s towering casino continued to rise along the shores of the Mystic, it became clear that the commission’s vetting hadn’t been as thorough as Crosby had promised, and that Crosby himself had overlooked red flags and made excuses for Wynn.
Now, in the wake of Crosby’s resignation, the future of the project he helped set into motion is in doubt. The state is nearing completion of a new investigation of Wynn Resorts and, depending on what it finds, could go so far as to revoke the license it granted four years ago and plunge the project deeper into chaos. So how did we get here?
Crosby’s critics—and they are legion these days—charge that he and the gaming commission were taken in by Wynn and the idea of bringing the most extravagant project possible to Boston. “I sat in a number of those hearings when Wynn was pushing for the license,” says Jon Keller, the longtime political analyst with WBZ-TV, “and it was pretty clear to me and others that [they] were in love with the glitz and glamour of Steve Wynn.” In the end, Wynn’s casino had nearly everything going against it—except Crosby and the MGC.
If you’re willing to wind back the clock all the way to before Steve Wynn joined the unholy pantheon of #MeToo monsters, you might be able to see him—for a moment—the way Massachusetts’ rich and powerful did when he landed here a decade ago. Back then, Wynn was the undisputed king of casinos, the man who personally invented Las Vegas as we know it. The Mirage, Treasure Island, and the Bellagio were all Wynn projects that transformed the strip from a grungy backwater cow town to the glitzy, hedonistic pleasure land we know and love (or loathe) today. All of these places were five-star, best-in-class resorts lauded even by snooty travel magazines. In short, if you were looking for luxe, Wynn was your man. He’d also conquered Atlantic City, and in the 2000s started opening casinos in Macau—a former Portuguese nub of land that today is the only place in China where gambling is legal—propelling himself from merely possessing fabulous wealth to being a billionaire multiple times over.
It wasn’t just the money, though. Wynn was glamorous, too. His art transactions—a $155 million sale of a Picasso masterpiece, for example—made national headlines. His friends—Steven Spielberg, Sly Stallone, Clint Eastwood—were A-listers. In the ’60s, when he first set foot in Vegas, he quickly became Frank Sinatra’s young new pal. The Rat Pack’s glam rubbed off on him, and it never quite faded. Even his voice—a seductive, baritone rasp—seems piped in from that era, idioms and all. When something is bad, Wynn calls it “the pits.” If he likes it, it’s “dandy.” You can almost hear him wink.
Wynn’s notoriety and cash paid immediate dividends in Massachusetts, where he set out to convince the MGC to grant him the sole Boston-area casino license made available under the 2011 law. To begin his campaign, he hired the high-octane Boston law firm Mintz Levin and the firm’s lobbying arm, ML Strategies, which put former state Senator Bob Havern, former U.S. Senator Mo Cowan, and former Governor Bill Weld on his account. Wynn’s strategy was the same he’d used when he entered Las Vegas in the 1960s, Atlantic City in the 1980s, and Macau in the 2000s: Charm the locals, win powerful friends, and, above all else, secure land. In the summer of 2011, he flew into Logan on his private jet and drove to Gillette Stadium for a meeting with Robert Kraft—not only the Patriots owner, but also a man with vast real estate holdings. The two business titans met privately in Kraft’s office and got to know each other before hammering out the preliminary terms of a deal to bring a Wynn casino to Foxboro. “He came with a proposal that would create 10,000 jobs,” Kraft would say later. Wynn left the meeting with exactly what he needed: an ally and a tentative plan to buy land from Kraft across the street from the stadium.
Meanwhile, other forces were lining up against Wynn. For years, the smart money had said that if the casino law ever passed, the owners of Suffolk Downs horseracing track, who wanted to revitalize the East Boston landmark, would get the coveted Boston-area license. Then–Boston Mayor Tom Menino and powerful House Speaker Bob DeLeo had always preferred that site above all others. Now the Suffolk Downs team was preparing to go head-to-head with Wynn and make the case to Crosby’s gaming commission that their company and location were the better choice. “Suffolk Downs at that point was the clear favorite,” says the Reverend Richard McGowan, a gambling industry expert and professor at Boston College. “There wasn’t anybody who thought they were going to lose.”
As the power players jockeyed for position, Crosby prepared the rules of the competition with his four fellow commissioners—James McHugh, Enrique Zuniga, Gayle Cameron, and Bruce Stebbins, former high-level officials with backgrounds in the judiciary, finance, law enforcement, and public service. There would be two phases: First, the gaming commission would vet applicants to test their suitability, a process that would fall to the commission’s new chief investigator, Karen Wells, a former white-collar prosecutor who had also served as the undersecretary for law enforcement overseeing the Massachusetts State Police. Then the commissioners would evaluate competing casino proposals and pick a winner.
Chairman of the commission, Crosby took charge of the process and invented a metric he dubbed the “wow factor” to help him cull the herd of applicants. “The wow factor,” he once explained, answers the question, “‘What makes this special?’” Meanwhile, as a newcomer to the industry, he jetted off to acquaint himself with the world’s great casinos, attending conferences and meeting with fellow regulators in Las Vegas, Macau, and Singapore to learn as much as he could. He took heat on Beacon Hill for these lavish trips, but Crosby and his fellow commissioners insisted they were essential to their work. In the end, however, critics assert that they overlearned the lesson. “They arrived at this idea that they wanted Macau-level resort casinos,” says Clyde Barrow, a casino industry expert and former professor at UMass Dartmouth. “Those are $4.5 billion facilities.”
Nothing could have made Wynn happier than learning “wow” was the benchmark for winning a casino license in Massachusetts. After all, “wow” was practically his brand. In anticipation of a Foxboro board of selectmen election that became a kind of proxy referendum on his casino project, he and Kraft laid out their pitch to the proud people of the town, airing a video on the Internet. It’s a strange production: The two suited men appear on screen against a purple backdrop, sitting in high-backed Bond-villain chairs. Kraft acts as the hype man. “The gentleman on my right is probably best-in-class in this field,” he says. Then Wynn invites the audience to imagine the casino he’ll build. “A beautiful lobby, probably with an atrium,” he says. “Glass walls looking into a garden.” It was a pitch seemingly tailor-made for the vision of what a Massachusetts casino should be. Classy, high-end, and not so much about, you know, gambling.
Despite Wynn’s operatics, Foxboro voters weren’t buying. In May 2012, they elected an anti-casino board of selectmen, crushing Wynn’s project with Kraft before it had even started. The billionaire’s fortunes had taken a sudden turn and the clock was ticking. His application was due to the gaming commission in just a few months and would need to include detailed plans. As his competitors at Suffolk Downs comfortably drew up their own designs, Wynn didn’t even have a site.
Through the summer and into the fall, Wynn executives searched for land—to no avail. Finally, in October or November, Wynn got a lead—though it was not without problems. An oddly shaped strip of land on the Mystic River in Everett, the plot had a Costco on one side and the hulking LNG import terminal on the other. It was also the former site of a Monsanto chemical plant and was thoroughly contaminated with toxic waste. Desperate, Wynn believed he could make it work. (“The development makes the location,” he liked to say.) Soon, his company struck a deal with the landowners. Wynn would pay them $100,000 a month for the right to eventually buy the land outright at a cost of $75 million, provided he won the Boston-area casino license. Suddenly, it seemed Wynn was back on track, except for one little thing: There were already whispers of ties between the Everett landowners and men with shady pasts. But there was little time to worry. Within weeks, Wynn submitted his application to the gaming commission, just beating the deadline.
Inside the gaming commission’s office during the winter of 2013, applications streamed in. MGM wanted to build a casino in Springfield. Hard Rock tested the waters in western Massachusetts and Greater Boston. Penn National Gaming applied for a slot-parlor license in Norfolk County. With candidates lining up, Crosby and the commissioners turned their attention to the crucial business of vetting. After all, Crosby promised, determining whether casino companies complied with the casino law and the commission’s own stringent suitability standards would be a process of unparalleled thoroughness, so the public could be confident that the state’s casinos were clean.
Almost immediately, the commission’s investigators discovered problems. The first operator to raise eyebrows was Ourway Realty, which owned the Plainridge horseracing track in Plainville and hoped to build a slot-machine parlor there. The company’s president, Gary Piontkowski, investigators uncovered, had been using the track’s money room as his personal ATM. Apparently, no one at Ourway had particularly cared—until the commission’s investigators started asking questions. Ourway acted quickly to try to make amends, forcing Piontkowski to resign and hiring a replacement who promised reforms. But when Crosby and the commissioners reviewed the evidence, they said the sin outweighed the atonement. Even though the offender was gone, the “culture of fear and concealment” that had enabled him was “pervasive,” commissioners concluded. And that couldn’t be easily remedied. The commissioners barred the company from the license jackpot, proving that their stringent suitability standards came with teeth.
The commission’s next victim was Caesars, a sprawling multinational casino company and a partner on the Suffolk Downs bid. In 2013, investigators discovered a link between Caesars and organized crime. Although the connection was tenuous—turned out, a company called the Gansevoort Hotel Group, which had a licensing deal with Caesars, was part-owned by a man with suspected ties to the Russian mob—MGC investigators were troubled. Like Ourway, Caesars tried to remedy the problem by severing its relationship with the questionable business partner. Again, that wasn’t enough. Investigators still recommended that the commissioners deem Caesars unsuitable under the MGC standards.
Days later, Suffolk Downs owner Joe O’Donnell called Caesars CEO Gary Loveman with bad news. The only way O’Donnell could save his own project, he explained, was to cut the casino company loose (and ultimately partner with a new outfit, Mohegan Sun). Loveman was livid—not with Suffolk Downs, but with the gaming commission. “It’s going to be very difficult for sophisticated, multi-jurisdictional operators”—like Caesars and Wynn—“to tolerate the environment this commission has created,” he said. Crosby, though, was unrepentant. “The integrity of this process is our single highest priority,” he said. “No other considerations will compromise that commitment.”
While commissioners were rigorously enforcing the suitability standards in some cases, behind the scenes Crosby was adopting a far more accommodating approach with Mr. Wow. In mid-February 2013, he received a call from Wynn, who was racked with “concerns,” he told his regulator, about Spectrum Gaming Group, a firm that the MGC had hired to investigate Wynn’s suitability. Spectrum was an international gambling consultancy with an office in Southeast Asia and deep experience digging into casino operations in Macau, where Wynn had a substantial and growing business. Wynn claimed, in a February 19 letter sent by his outside counsel, that Spectrum had a conflict of interest—Spectrum had previously worked for a casino company that bid against Wynn for a license in Pennsylvania—and insisted that the commission remove Spectrum from his case. (The State Ethics Commission later cast doubt on Wynn’s claim, writing that a “reasonable person” with knowledge of the facts would be unlikely to conclude that a conflict existed.) Next, Wynn’s lawyers fired off a March letter saying they believed, but could not confirm, that Spectrum’s Southeast Asia office had previously investigated Wynn on behalf of Wynn’s former cofounder who was locked in litigation with the company. Crosby relented, and soon, Spectrum was off Wynn’s case, replaced by a New Jersey law firm called Michael & Carroll that lacked Spectrum’s investigative resources in Asia.
In defense of the move, a spokeswoman for the gaming commission said that both Spectrum and Michael & Carroll “have extensive gaming and international experience.” Still, says Barrow, the casino industry expert, Crosby and the commission should have been more skeptical of Wynn’s request to remove Spectrum. “That would have made me suspicious from the outset,” he says. “Why did they not want Spectrum doing the background investigation?”
Curious, I did a little digging to see why Wynn had been so concerned. I found out that one of Wynn Resorts’ partners in Macau is connected to a gangster, according to legal documents, corporate filings, and public records. Suncity Group, founded by Alvin Chau, operates VIP rooms inside Wynn’s casinos. Chau’s company is itself a multibillion-dollar business and important enough to Wynn that he highlighted it in a 2015 earnings call. Last October, Chau founded a separate company with a convicted criminal named Vong Tat Hou, who had previously served a decade-long prison term for misdeeds related to his time as a lieutenant in a notorious “triad”—a term used to describe some units of Chinese organized crime. “This is probably more significant than the Caesars situation,” Barrow told me when I described these facts to him, “because this is a known organized criminal, and with Gansevoort it was just a rumored tie.” Good thing for Wynn, then, that the gaming commission didn’t find out. Still, Wynn Resorts has a ready reply: It says that “[n]either SunCity nor Alvin Chau are ‘partners’” with Wynn Resorts; SunCity operates with all of the gaming companies in Macau; and Wynn Resorts “is unaware of Vong Tat Hou or that he has any connection to SunCity.”
By the summer of 2013, the gaming commission’s growing staff had finally filled up its 10th-floor State Street office. But, under Chairman Crosby’s leadership, the young agency still had the feel of a startup—because it was one. Crosby also wasn’t your typical bureaucrat. He had a mullet personality—with a formal, deliberate bearing in public, but a football-bro jocularity behind the scenes. He didn’t mind acting paternal, too, when it was called for. Once, when a personal issue cropped up among the commissioners, Crosby invited them to his Jamaica Plain home to work it out. It was in this context of bonhomie that the gaming commission plunged into its first true crisis.
At the end of a routine hearing on August 9, 2013, Crosby—impeccably dressed as always in a dark-blue suit, yellow tie, and French cuffs—asked all members of the public to clear the room, a conference hall in a government office tower on the border of Chinatown and the South End. Sitting at a table, flanked by his four fellow commissioners, he reminded the techs to shut down and remove from the room recording equipment of any kind. The commissioners and their senior staff had private business to discuss.
The commissioners themselves didn’t know what was coming. Wells, the chief investigator, opened the conversation on Wynn. Her office had received a tip from the FBI. According to phone-call recordings, a suspected Mafia associate and convicted felon named Charles Lightbody had been bragging to an imprisoned wise guy about his secret ownership stake in the Everett land that Wynn had agreed to buy. Lightbody, whose rap sheet included assault and identity-theft convictions, also told his friend he was conspiring with his partners to conceal his identity. The news was a bombshell and spoke directly to the question of Wynn’s suitability. Had Wynn knowingly gone into business with a felon? Even if he hadn’t, could the commission—keeping in mind their mandate “to ensur[e] public confidence in the integrity” of the industry—let Wynn erect a casino on land tied to a suspected associate of La Cosa Nostra?
Before commissioners could process these questions, Crosby interrupted with his own confession: He was friends and former business partners with one of the Everett landowners, a man named Paul Lohnes. Hearing this, Wells’s face “dropped,” Crosby later wrote in an email. Crosby’s relationship with Lohnes, undisclosed until then, was potentially a tremendous conflict of interest: Crosby’s friend stood to make tens of millions of dollars from the land sale, but only if the Crosby-led commission granted the Boston-area casino license to Wynn.
The commission now had two extremely sticky situations to deal with. To address the first, Crosby privately recused himself from any deliberations regarding the land deal. Then the commission looked into the Lightbody connection. One of the key questions that investigators wanted to answer was whether Wynn and his employees had known about Lightbody all along.
There is, in fact, significant circumstantial evidence—but no smoking gun—suggesting that Wynn executives were aware of Lightbody. At the very least, several lobbyists and lawyers at Mintz Levin were, according to later court filings. One lobbyist, Bob Havern, even called Everett City Hall seeking information on Lightbody from the administration of Mayor Carlo DeMaria (who, fun fact, was a longtime friend of Lightbody’s). Later, an employee of one of the landowners testified under oath that his boss had told Wynn’s general counsel, Kim Sinatra, and then-CFO, Matt Maddox, about “a partner who has a checkered past.” When confronted by the commission, Wynn Resorts answered that no one had been the wiser. Wynn Resorts tells Boston magazine that when it entered into its option to buy the Everett land, “it was not aware of Charles Lightbody or his connection to the property.” The MGC issued subpoenas, took sworn testimony, and, after several months, concluded that Wynn was telling the truth. He and his people hadn’t known a thing.
Instead of disqualifying Wynn for signing a land deal tied to a reputed Mafia associate, the gaming commission devised a convoluted solution designed to do one thing—allow the Wynn proposal to go forward. The idea boiled down to this: The commissioners did not want a convicted felon to get rich from the casino industry—and they couldn’t rule out the possibility that Lightbody still had a stake in the land. So they required Wynn to reduce his agreed-upon purchase price for the land from $75 million to $35 million. The theory was that $35 million was the price the Everett landowners could fetch on the open market in an imaginary scenario in which casinos were not legal in Massachusetts. So, voilà, the Everett landowners wouldn’t be getting rich on the casino industry; they would just be making a healthy return on a run-of-the-mill real estate investment. In December, the four non-recused commissioners officially sanctioned this solution. That same month, they deemed Wynn suitable to do business in Massachusetts. The net result: Wynn got a clean bill of health and a $40 million gift.
Throughout 2013, Suffolk Downs’ chief operating officer, Chip Tuttle, had watched the gaming commission’s proceedings with a growing sense of alarm. He had never believed—like many experts—that his team had a lock on the Boston-area license, but he had known the Suffolk Downs group was the favorite and, if he was being honest with himself, was expected to win. At least until recently. Now, after watching the events of the past year—which included his partner Caesars running into the MGC’s suitability buzz saw—he wasn’t so sure. Calling the gaming commission’s decision on the Everett land deal a “wake-up call,” he says that it “seemed inconsistent that the state that had set out to have the highest possible standards of suitability was going to figure out a way to let Wynn Resorts buy its land from a convicted felon.” He couldn’t help but wonder if the fix was in for Wynn. “After that,” Tuttle says, “clearly we started wondering if we might be playing for second place.”
Wynn, for his part, was feeling good about his chances—and the “wow factor” contained in his casino proposal. After navigating the morass of the suitability investigation, he was back in charm mode. After all, he argued, only Wynn could give Boston the five-star casino it really deserved. Always aiming to please the customer, he promised he would best the Suffolk Downs–Mohegan Sun bid in all categories, creating more jobs and more tax revenue, and drawing more out-of-towners to Massachusetts. “We’re spending $1.5 billion,” he told CommonWealth magazine’s Bruce Mohl during an interview at his Las Vegas villa in March 2014. “There’s nothing like that.” On September 16, 2014, Wynn and Suffolk Downs made their final pitch to the gaming commission at the Boston Teachers Union Hall in Dorchester. As he filed into the building, Tuttle was hoping for a Hail Mary. He felt Commissioner McHugh favored the Suffolk Downs casino, but feared the other three commissioners were lost. At 9 a.m., McHugh, acting as chairman in place of Crosby (who had now recused himself from the license decision, too), opened the meeting. Mohegan Sun head Mitchell Etess spoke next. He appeared nervous, speaking a bit too quickly and looking down at his notes every few words. The stark differences between the two proposals became clear immediately. Suffolk Downs and Mohegan Sun planned to spend $1.3 billion (compared to Wynn’s projected $1.6 billion) on a project scaled for the local and regional market. They pitched it as the hometown choice. In an earlier slideshow presentation, the soundtrack had been the Dropkick Murphys. The commissioners listened politely. If this was a Hail Mary, the pass was incomplete.
Then former Governor Bill Weld—who’d become Wynn’s lead lobbyist—took the floor. Tuttle’s sense of doom deepened. “He kind of commanded the room,” he says. Weld’s pitch was simple: If you want the best, choose Wynn. “In dealing with these folks,” he told the commissioners, “you take a bite of sirloin, you take another bite, it’s still sirloin. It doesn’t vary.” After the presentations, the room fell silent as the commissioners discussed and debated. As Tuttle had feared, the panel voted three to one in favor of awarding Wynn the license. At long last, the interloper had won.
Three days later, a triumphant Steve Wynn showed up at the gaming commission’s office carrying a parcel. As he met with each commissioner to say a personal thank you, he produced a sample bed linen of the kind he would use in the rooms of the new casino. He wanted the commissioners to see and feel the fabric’s high quality for themselves.
In some respects, it should have been a time for celebration. After years of work, the commissioners had finally awarded the state’s most important license. (Earlier, they had issued the western Massachusetts license to MGM, which opened a Springfield casino in August; the southeastern Massachusetts license has not yet been claimed.) But no sooner had they done so than lawsuits started pouring in. Filed by the cities of Revere, Somerville, and Boston, plus an electrical workers’ union and Mohegan Sun, the civil complaints alleged that the gaming commission and Crosby himself had shown extreme bias in Wynn’s favor throughout the licensing process. Months later, a judge dismissed the Boston lawsuit. The Mohegan Sun lawsuit, which Wynn Resorts says is merely a play by the Connecticut casino owner to delay the Everett project, is ongoing. Other lawsuits include one against Wynn Resorts, filed in September by the former owner of Suffolk Downs, that attacks the Everett land deal and the commission’s role in it. In response to the onslaught of criticism and legal actions, a gaming commission spokeswoman released a statement saying, “The Gaming Commission anticipated that unsuccessful applicants, vying for one of the limited number of highly coveted expanded gaming licenses, would be disappointed….We are confident that the complicated [Boston-area] licensing process was executed in a thoughtful, fair, and transparent manner.” Rosenberg also defends Crosby and the MGC, agreeing their process was transparent and fair and adding that they achieved the goals of the 2011 casino law. Pointing to the MGM Springfield casino, which is already open, and the Wynn Resorts casino, which is on the way, he says, “The outcome is exactly what [the legislature] asked for.”
There were also fresh warning signs that Wynn Resorts might not be the standup company the gaming commission had deemed it to be. A Wall Street Journal report raised the possibility that, in 2014, Wynn Resorts funneled $2 million through the Republican Governors Association to a political committee supporting Charlie Baker’s campaign for governor, possibly violating Massachusetts campaign finance laws. Wynn Resorts, however, says it “specifically directed that no contributions to the RGA were to be used for any political campaign or event” in Massachusetts. The RGA says it complied with that directive by allocating the $2 million to a “corporate unlimited” account “which thereafter was not used to contribute to a Massachusetts independent expenditure committee making paid communications” supporting Baker. After facing pressure to investigate, the gaming commission issued a memo blessing the contribution, and took no action against Wynn Resorts.
Although it was possible for Wynn and the MGC to downplay or explain away these issues, the darkest side of the company came into full view this past January, when the Wall Street Journal published a devastating account of allegations of sexual harassment and assault committed by Wynn over decades. Wynn has strenuously denied all of the accusations, which ranged from gross innuendo (“What are you wearing?” a secretary said Wynn had asked her) to sexual coercion (a manicurist said he had pressed her into undressing and submitting to sex with him in his office). When a link to the Journal story landed in Crosby’s inbox, he emailed his wife a three-letter message: “OMG!”
The article changed everything.
There seemed to be no way the gaming commission could argue that Steve Wynn was still “suitable.” After all, suitability, according to the casino law, was an ongoing requirement for a casino company and all of its key executives. If Wynn remained the CEO of Wynn Resorts, it seemed all but inevitable that the gaming commission would have to revoke the company’s license—which would plunge the Wynn casino project itself, already half-complete, into bedlam. “If his board deals with it, easy for us,” Crosby wrote in an email to a friend, referring to the possibility of Wynn Resorts’ board firing Wynn. “If not, hmmm.”
In the meantime, Crosby knew he had to act. In January 2018, at the height of the #MeToo movement, the Wynn allegations were not something he could slow-play. “These fires burn so hot they can consume anything they touch,” he wrote to a friend. “Hopefully we can do this right.” On January 31, during a public hearing, the gaming commission’s meeting hall was packed wall to wall. Crosby announced that the commission had opened a new investigation into Wynn Resorts that would determine, among other things, the significance “of these appalling accusations on the suitability status of Mr. Wynn.” Investigators also revealed that Wynn Resorts had actively concealed from the commission a $7.5 million settlement that Wynn had paid to the manicurist in 2005, raising even more questions about the company’s suitability. Six days later, Wynn resigned as chairman and CEO of Wynn Resorts, even as he denied all allegations against him and cast the press reports as a smear campaign orchestrated by his ex-wife. “Things are looking a little easier,” Crosby wrote to a friend.
As the gaming commission pursued its new investigation, Attorney General Maura Healey called for the casino—branded as “Wynn Boston Harbor”—to change its name, and Wynn Resorts complied, replacing the word “Wynn” with “Encore.” But Massachusetts Democrats were not satisfied. Jay Gonzalez, who was running against Baker for governor, even made a campaign issue of the question. “This license should be yanked,” he said. “We have to start standing up to people who engage in this conduct and also the institutions that enable it and facilitate it.”
As public opinion hardened against Wynn Resorts, the company tried to improve its image. It jettisoned its general counsel, Kim Sinatra, who had allegedly known about the $7.5 million settlement for years. The company added women to its board and booted some old Steve Wynn loyalists. In meetings with the gaming commission in the spring, executives, including new CEO Matt Maddox, attempted to distance the company and the casino from Wynn. (Never mind the company’s name and its logo, which remains Steve Wynn’s signature.) They were laying the groundwork, it seemed, to make the case that this was just one bad apple—even though that same argument hasn’t worked for Ourway Realty just a few years earlier. “I’m sure there will be some interesting double talk” to explain how Wynn Resorts is still suitable, McGowan, the gambling industry expert, told me in August.
Conversely, pulling the license would likely compel Wynn Resorts to sell the casino—and it’s not clear there would be any buyers. In the spring, as Wynn Resorts’ stock fluctuated in the wake of the allegations against the boss, company executives talked to potential suitors. It turned out that not many people—besides Steve Wynn—wanted to drop a couple billion dollars on a toxic brownfield in Everett. The nightmare scenario, which no one really wants to think about, is that Encore Boston Harbor could be left in limbo, rotting on the banks of the Mystic for decades.
None of this appeared lost on Crosby. On September 13, in his final misstep as chairman of the gaming commission, he seemed to telegraph that he was once again going to find a way to keep Wynn Resorts in the game. After a public hearing, he told a reporter from MassLive that, from his perspective, “There clearly [was] by all accounts at least one terrible predator” at Wynn Resorts, but that the culture of the company was, in other ways, exemplary. Crosby was sure, he said, that “Wynn Resorts’ sensibilities have changed.” Immediately, Mohegan Sun’s lawyers pounced, accusing Crosby of prejudging the outcome of the commission’s follow-up investigation. (Wynn’s lawyer also complained, saying Crosby’s “predator” remark was defamatory.) Even Governor Baker seemed to lose confidence in the man appointed by his predecessor, saying in a brief statement that Crosby “must carefully consider recusing himself.” With the commission’s high-stakes, winner-take-all decision looming, Crosby abruptly resigned, citing his “frustration” and insisting that he had done nothing wrong.
The following morning, I took an elevator up to the gaming commission’s office and found the place eerily quiet. Two women sat together at the front desk looking somber. A third woman approached them. “How are you doing?” she asked. “Mmhm, okay,” one of the seated women said. When the four remaining commissioners silently filed into the room for the morning’s hearing, they left Crosby’s seat at the center of their table vacant. If I hadn’t already known the news of his departure, I would have thought Crosby had died. Each commissioner eulogized him. Zuniga choked up. Then they turned their attention to the commission’s executive director, who informed them that the Wynn investigation was in its final stages and they could expect a recommendation the following month. (As of press time, the report and the commission’s final decision were still pending.)
Despite the tumult at the commission and the tough talk about the seriousness of its vetting process, there are signs that Wynn Resorts remains optimistic about its chances of survival. Around Labor Day, the company hoisted a 30-foot-tall “Encore” sign onto the upper reaches of the casino’s façade. In September, it opened its card-dealer school in Charlestown to prepare its workforce. Construction at the site is humming along, at a cost of millions of dollars a week, ahead of pace for the casino’s scheduled opening in June 2019. Few people are betting that the MGC will revoke the license. “They got into bed with Wynn rashly and without proper vetting,” Keller says, “and now they’re stuck with the consequences.”