Late on Tuesday night, Las Vegas legend Steve Wynn resigned as CEO and chairman of the board of Wynn Resorts Ltd. (NASDAQ:WYNN), the company he founded. The board of directors announced that Matt Maddox, Wynn Resorts' president, would take over as CEO immediately.
The move is a shock for Las Vegas, a city that has Wynn's fingerprints all over it. He built Mirage, Treasure Island, Bellagio, and Wynn and Encore Las Vegas, four of the biggest and most successful resorts on The Strip, and is arguably the most identifiable figure in the city.
End of an era
As a company, Wynn Resorts seems to be sad to see Steve Wynn go. This is the statement non-executive director of the board Boone Wayson gave on behalf of the Wynn Resorts Board of Directors:
It is with a collective heavy heart, that the board of directors of Wynn Resorts today accepted the resignation of our founder, CEO and friend Steve Wynn, Steve Wynn is an industry giant. He is a philanthropist and a beloved leader and visionary. He played the pivotal role in transforming Las Vegas into the entertainment destination it is today. He also assembled a world-class team of executives that will continue to meet the high standards of excellence that Steve Wynn created and the Wynn brand has come to represent.
The press release clearly casts Steve Wynn in a positive light, but the sexual misconduct allegations that led to his resignation paint a far different picture. And those, ultimately, are why he's no longer Wynn Resorts' CEO.
Steve Wynn himself said the following in the Wynn Resorts press release:
In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity. As I have reflected upon the environment this has created -- one in which a rush to judgment takes precedence over everything else, including the facts -- I have reached the conclusion I cannot continue to be effective in my current roles. Therefore, effective immediately, I have decided to step down as CEO and Chairman of the Board of Wynn Resorts, a company I founded and that I love.
What neither the board nor Steve Wynn addressed is if there was pressure from regulators in Las Vegas, Macau, or Boston to oust him. The Massachusetts Gaming Commission said publicly they would investigate the sexual misconduct allegations, and there was talk that the company's gaming license in Massachusetts could be yanked. Any pressure in Las Vegas and Macau could have made it nearly impossible for Steve Wynn to stay in charge of the company, regardless of other factors.
Where does Wynn Resorts go from here?
Operationally, this may free Wynn Resorts as a company to move forward with its growth plans. Steve Wynn said in his statement:
The Wynn Resorts team and I have built houses of brick. Which is to say, the institution we created -- a collection of the finest designers and architects ever assembled, as well as an operating philosophy now ingrained in the minds and hearts of our entire team -- will remain standing for the long term. I am extremely proud of everything we have built at this company. Most of all, I am proud of our employees.
As investors, this may be the biggest takeaway. Wynn Resorts as a company probably won't change much without its founder at the helm. The culture will remain the same, and its focus on high-end customers will continue to drive service few rivals can compete with.
That isn't to say that some customers won't shun the company's resorts, but Steve Wynn's stepping down may reduce the damage, and long term, Wynn Resorts should continue to attract customers in the same way it did while he was at the helm.
There are still a number of details to be worked out, like a separation package and whether Steve Wynn will remain a major shareholder -- which requires a gaming license in some locations. But those details should be coming out in the next few weeks.
What we know is that Steve Wynn's time as a major player in Las Vegas appears to be coming to an end, and his resignation will send a shock wave through the gaming industry. As the company tries to put the sexual misconduct allegations that led to his resignation behind it, my remaining question is this:
Is the name Wynn Resorts the next to go?