Federal Judge Revives Investor Claims against Wynn Resorts
A federal judge in Nevada is reviving the class-action lawsuit against Wynn Resorts Ltd. According to the lawsuit, executives at the company were aware of former CEO and founder Steve Wynn’s behavior but chose to ignore or act on reports of sexual harassment and misconduct originating from the alleged victims of the retired casino mogul.
For his part, Wynn fought off all allegations in court and was able to settle and clear his name. He then decided to go on the offensive and threatened to sue anyone who denigrated his name by claiming that he had been involved in sexual misconduct in the first place.
US District Judge Andrew Gordon weighed in and said that the case might proceed. In the filing, the plaintiffs argue that Steve Wynn, various executives, and board members were aware of the matter.
Based on the plaintiffs’ claim that violated Securities and Exchange Commission laws that pertained to “material misrepresentations and omissions.” The lawsuit is launched not so much by alleged victims of Wynn but rather by people who argue that they have suffered financially.
Represented by Murielle Steven Walsh, the plaintiffs argue that hiding the alleged sexual misconduct and harassment by corporate executives are “material issues for investors.” Wynn Resorts responded to the case and welcomed the plaintiffs to move “beyond the allegation stage,” suggesting that if there was enough evidence for a full-blown court trial, the company was prepared to defend itself.
So far, there has been no substantial evidence to suggest that the reports have been true and similar cases have been dismissed by the court previously. The Massachusetts Gaming Commission (MGC) launched a very comprehensive review of all the allegations but settled for fining Wynn Resorts $35 million as opposed to suspending its license to operate in the state.
According to the MGC, the company had failed to investigate the issues pertaining to the allegations originally brought in by the Wall Street Journal (WSJ). A similar investigation was undertaken in Nevada, but on both counts, Wynn Resorts defended its name and innocence in the matter.
Wynn Resorts Reports $1.72bn in H1 Revenue
Following an eventful 2020, the company is finally here with its first half-year results for H1 2021. Wynn Resorts had to address many challenges during the same period a year before, mostly brought on by the pandemic, but the first half of 2021 was one marked by a strong recovery.
Wynn’s casino operations managed to bring in a whopping $1.11 billion over the period, marking a quick 92.8% growth year-over-year. Food and beverages went up 25.5%, coinciding with increased foot traffic in key markets where Wynn Resorts holds assets.
Wynn Palace in Macau remained the company’s leading property, having brought in $507.6 million in revenue, compared to only $268.2 million a year before. Wynn Macau generated $363.6 million in terms of revenue, a significant increase from $241.2 million.
Back at home, Wynn’s Las Vegas operations and Encore Boston Harbor brought in another $355.1 million and $135.2 million, respectively. Overall, Wynn Resorts is on a recovery trajectory, and the company seems to be keeping its strong positions in all key casino markets.
Overreliance on Macau, though, may be a little worrying as all casino licenses are soon up for renewal, and there are no promises that they would all be signed off by the government. A sign of positivity is the return of tourists in Las Vegas, but with travel restrictions for non-vaccinated travelers and Covid-19 cases surging, the industry nor Wynn Resorts aren’t quite out of the woods yet.
Penn National Gaming is embarking on an ambitious deal with Score Media and Gaming whereby the former will acquire the assets of the latter and create North America’s biggest digital sports content, gaming, and technology company.
Penn National will carry out the deal, which is valued at $2 billion, paying in cash and stock with theScore shareholders receiving $17 in cash and 0.2398 shares of Penn National common stock for each theScore share. The deal has met no resistance on an executive and shareholder level and has garnered the unanimous approval of the board of directors of both companies.
The stock divvied up between the two companies’ shareholders will be 93% to 7% in favor of Penn National Gaming investors. Penn National CEO Jay Snowden commented on this monumental partnership by saying:
“We are thrilled to be acquiring theScore, which is the number one sports app in Canada and the third most popular sports app in all of North America. theScore’s unique media platform and modern, state-of-the-art technology is a powerful complement to the reach of Barstool Sports and its popular personalities and content.”
TheScore CEO John Levy argued that the move is bringing together two companies that agree on how media and gaming intersect. He will also remain in charge of theScore side of the business as the company continues with its recruitment push and investment in the burgeoning Canadian sports betting market.
According to theScore COO Benjie Levy, who will also retain his position, the merger will lead “to a first-of-its-kind vertically integrated media and omni-channel gaming business.”
The move follows a broader push for mergers & acquisitions for the gaming and sports gambling industry, with many companies merging or acquiring one another in recent months. In the past few years, there have been several landmark deals of a similar caliber.
FanDuel acquired Paddy Power Betfair in 2018, and The Stars Group secured William Hill Australia’s assets. Caesars Entertainment bought out William Hill’s US assets, and Penn National Gaming previously managed to acquire Barstool Sports.