Wynn Tumbles After Macau Government Adds to Harassment Scrutiny

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Sexual harassment allegations swirling around casino magnate Steve Wynn in the U.S. are causing ripples and headaches for Wynn Resorts Ltd. on the other side of the world in Macau.

The government of the Chinese territory has talked with Wynn management and wants to make sure major shareholders, directors and key employees meet suitable qualifications, the Gaming Inspection & Coordination Bureau said in an email. Wynn shares tumbled Monday for a second straight trading day, falling as much as 7.6 percent.

The scandal threatens to complicate Wynn’s plans for the world’s largest gambling hub, since regulators in Macau are set to outline the process for casino-license bidding later this year, with permits up for renewal beginning in 2020. The Asian gaming enclave now accounts for more than three-quarters of Wynn’s earnings, and the casino operator has big plans for a further expansion after opening the Wynn Palace there in August 2016.

Founder’s Fate

Some investors are calling for the company to oust Steve Wynn, raising the prospect of a volatile transition period. Bloomberg Intelligence analyst Margaret Huang says possible successors to the 76-year-old casino magnate include Linda Chen, chief operating officer of Wynn Macau. Wynn cited Chen as one of the company’s executives fit to take over when asked about a potential replacement in 2011.

The repercussions could be felt beyond Macau. Japan is opening up to casino resorts, and government officials are already sensitive to negative perceptions about the industry as they consider regulations and licenses for casino operators.

— With assistance by Lisa Du

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