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Wynn Macau highlights risks from founder’s departure

In a management analysis and discussion in its annual report, Wynn Macau highlighted the potential risks the company may face from the February resignation of founder and Chairman Steve Wynn following accusations of sexual harassment.

“The resulting controversy related to Mr. Wynn and his separation from the group could significantly harm our business in numerous ways, including in ways that we cannot predict,” the report says. “The DICJ, our gaming regulator in Macau, is monitoring and reviewing the situation, and we are cooperating.”

It pointed out that additional allegations have been made and more may appear in the future that may have an impact on the group.

Wynn is also in continuing litigation in Macau with former director and shareholder Kazuo Okada over the forced redemption of shares and allegations over land rights linked to the Cotai plot where the Wynn Palace is located.

“The foregoing events, controversy and possible litigation or disputes may also lead to additional scrutiny from regulators,” the report notes. “In addition, publicity of the foregoing events, controversy and litigation and disputes (actual and potential) could negatively impact our business, reputation and competitive position and could reduce demand for the securities of the company and thereby have a negative impact on their trading prices.”

Finally the group notes that its reputation was built on the back of its founder Steve Wynn and the perception of its business may be damaged by his departure and loss of skills.

For 2017, Wynn Macau reported a 63.1 percent jump in revenue to HK$36.04 billion, helped by the first full year of operation of Wynn Palace, which opened in August 2016 and from higher VIP gaming volumes at Wynn Macau.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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