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April 16, 2014

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Panel: Wynn Resorts suitable to open casino in Massachusetts

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Justin M. Bowen

Steve Wynn meets with the media in a villa at Wynn Las Vegas on Wednesday, April 27, 2011.

BOSTON — The Massachusetts Gaming Commission's investigative bureau has found Wynn Resorts suitable to open a resort casino in Everett.

The recommendation, made in a report released Monday at a commission meeting, represents one less hurdle Wynn must clear as it seeks to win the sole eastern Massachusetts casino license allowed under the state's 2011 casino law.

The commendation comes after four commission members signed off on a revised real estate deal for the proposed casino on Friday.

It also comes after Las Vegas-based Caesars filed a lawsuit against Commission Chairman Stephen Crosby for allegedly failing to disclose a potential conflict of interest in a timely manner related to the Wynn deal. Caesars had been a partner of the Suffolk Downs horse track in a resort casino bid, but it withdrew in October over concerns raised during the background check by commission staff.

Karen Wells, director of the commission's Bureau of Investigation and Enforcement, said the recommendation to find Wynn suitable comes with a few conditions, including convincing the commission that the company's business practices in Macau meet the requirement of "responsible business practices."

Macau is a Chinese administrative region that has become the most lucrative gambling market in the world. Both Wynn and MGM Resorts International, which hopes to build a casino in Springfield, have operations in Macau.

While Wynn's Macau operations have come under scrutiny, Steve Wynn, chief executive of Wynn Resorts, said the company works hard to stay within the law.

"Do we allow illegal activity in our casinos? The answer is no, no, no," Wynn said at Monday's hearing.

Wynn officials have also defended the use in Macau of so-called junket operators, saying they are all licensed and subject to criminal background checks by the government, along with additional background investigations by the company.

Junket operators recruit well-heeled gamblers from the mainland for Baccarat in VIP rooms in Macau's casinos, often providing credit to players. They have gotten the attention of regulators because of alleged connections to organized crime.

Crosby said the commission spent about $1.5 million investigating Wynn — much of it looking at the operations in Macau — but found few red flags.

"It seems like they run as buttoned-up an operation in Macau as pretty much can possibly be done," he said.

In her bureau's report, Wells also recommends that if Wynn Resorts is awarded a casino license, it be required to promptly report any changes in ownership, members or directors — and that those new owners, members or directors be found suitable by the commission.

Monday's recommendation comes as Crosby continues to grapple with his revelation of his past business relationship with Paul Lohnes, a part owner of land in Everett on which Wynn Resorts hopes to develop its casino.

In its lawsuit, Caesars challenges the "objectivity and fairness" of its treatment by Crosby, alleging Crosby's intent was to block the impartial consideration of Suffolk Downs' casino application. Caesars was competing for the same eastern Massachusetts casino license that Wynn is seeking.

Crosby said he isn't planning to recuse himself from the Wynn vote. He said the process has been "incredibly transparent."

"I think fair and reasonable people will see that and realize that I've fulfilled my obligations of disclosure," he said.

Wynn, who at times appeared to doze off during the hearing, was being represented by former Massachusetts Gov. William Weld.

The commission's decision on Wynn's suitability isn't expected for at least another week.

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