Wynn’s high stakes fight

March 5, 2012 11:15 am

The New York Times provides an insightful overview into the high stakes legal fight between two billionaire casino moguls: Steve Wynn and Kazuo Okada.

The two have filed dueling lawsuits that contain accusations that have caught the attention of government regulators.The dispute offers a rare insight into the alleged dubious business practices of one of the best known casino operators, which should give U.S. lawmakers some pause about getting into the casino rackets.

Wynn alleges Okada gave a visiting Philippine gambling regulator and his entourage free use of the Wynn Macau casino-resort’s Villa 81 — a 7,000-square-foot pleasure palace that rents for $6,000 a night and has amenities including his-and-hers bathrooms with showers built to accommodate six people at a time. The Philippine chairman, Cristino Naguiat, said he accepted the free lodging, but denied there was anything wrong with it.

Meanwhile, Okada is questioning the propriety of a $135 million donation that Wynn Resorts made last year to the University of Macau, whose chancellor is also the head of Macao’s government. Okada’s lawsuit has prompted an inquiry by the Securities and Exchange Commission. Both Wynn and Okada deny any wrongdoing.

Okada joined Wynn’s board and became his largest investor at a time when his casino empire was under attck. But the piece raises questions as to whether Wynn and Okada were ever really close friends, or just played the part because of their shared casino interests. The stakes are high: Macau, the former Portuguese seaport colony now controlled by China, had annual gambling revenue four times that of the Las Vegas Strip. In fact, Macau was the source of all of Wynn Resorts’ $613.4 million in profit last year, offsetting losses in Nevada.

The piece also says a Nevada regulator warned Wynn about getting into business with Okada who was engaged in a series of tax disputes with Japanese authorities. ”At a 2004 regulatory hearing, a Nevada official told Mr. Okada that Mr. Wynn was putting his reputation on the line in allying himself with someone from the Japanese pachinko industry, even if regulators had never found ties between Mr. Okada and crime rings,” The Times reported.

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