The latest twist in the five-year legal battle between Steve Wynn and his former partner and friend Kazuo Okada has ended in a victory for Wynn.
Okada, who was ousted from Wynn Resorts’ board in 2012 in connection with a bribery scandal in the Philippines, had demanded the company produce documents showing how his removal was accomplished. But the Nevada Supreme Court has ruled that Wynn isn’t required to comply. The court’s unanimous decision said the company was protected on the basis of attorney-client privilege.
Wynn hailed Okada as a close friend when the Japanese machine gaming tycoon joined Wynn Resorts 15 years ago as a co-founder and major investor. But the relationship soured with Wynn’s increasing involvement in Macau and his refusal to join his partner in developing a destination casino in Manila. Then allegations arose that Okada’s Philippine subsidiary was paying bribes to curry favor with gaming regulators in the country, and the FBI launched an investigation into whether a $40 million payment to a consultant in Manila was actually a kickback to government officials.
Wynn launched an investigation of its own that resulted in a decision to sever its relationship with Okada and redeem all of his shares, which at the time were valued at $1.9 billion. Okada challenged the decision and the two have been battling in court ever since.
What’s not certain is how this is playing in Japan as the country moves toward crafting a regulatory and investment framework for a resort casino industry experts believe has the potential to be the largest in Asia and one of the largest in the world.
The prospects have attracted an A-list of operators?Las Vegas Sands, MGM Resorts International, Caesars Entertainment and Wynn Resorts among them. But investment research and management firm Morningstar recently suggested that the fight with Okada could hurt Wynn’s chances on the billionaire’s home turf.
Further complicating matters is a recent corruption scandal involving Prime Minister Shinzo Abe, the biggest proponent of casino legalization. The alleged misconduct concerns campaign donations from friends of Abe’s that could appear to be bribes.
Okada, meanwhile, has troubles of his own. Earlier this year, he was removed as chairman of Universal Entertainment, the pachinko and slot machine giant that underpins his fortune, after he allegedly made a US$ 17.3 million transaction with company money to an entity reportedly owned by himself and his son. He is now suing his wife and two of his children to regain control of Universal Entertainment’s Okada Holdings, the company’s corporate parent.
