Wynn's Macao casino accounted for all of the company's profit last year "” more than offsetting its money-losing sites in Nevada.
MACAO — For more than a decade, they were the odd couple of gambling.
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Stephen A. Wynn and Kazuo Okada at a 2004 hearing in Nevada. In 2008, Mr. Wynn said, "He's my partner and friend."
In the early going, Stephen A. Wynn, the Las Vegas magnate with a thousand-watt smile, was on the rebound after his casino and resorts empire, Mirage Resorts, fell prey to a hostile takeover in 2000.
To bankroll his comeback, he turned to a Japanese billionaire, Kazuo Okada, who had made much of his fortune manufacturing gaming machines for Japan’s notorious pachinko parlors — and who was adept at the wild ways of the mushrooming Asian gambling industry.
Together they formed Wynn Resorts, with Mr. Okada eventually becoming the company’s biggest shareholder.
“I love Kazuo Okada as much as any man that I’ve ever met in my life,” Mr. Wynn effused during an earnings conference call in May 2008.
The love affair is over. Mr. Wynn and Mr. Okada are now embroiled in a nasty corporate divorce, in one of the most rancorous public feuds the international gambling industry has ever seen.
With each side accusing the other of questionable payments to public officials in Asia, many gambling executives fear collat-eral damage. They worry that the accusations could prompt government investigations into any number of ethically questionable business practices in gambling, where Asian regulators have often looked the other way.
“It’s like two gunslingers shooting it out,” said a longtime industry official, who insisted on anonymity because he knew both men and wanted to protect the relationships. “And what I’m wondering is whether they’ll both kill each other.”
The fight is playing out in Las Vegas, where Wynn Resorts is based, and here in Macao, the former Portuguese seaport colony now controlled by China, where annual gambling revenue is four times that of the Las Vegas Strip. Macao (often spelled Macau) was the source of all of Wynn Resorts’ $613.4 million in profit last year — more than offsetting its money-losing properties in the moribund Nevada economy.
Despite the partners’ joint success in playing the gambling game by Macao’s lax house rules, Mr. Wynn’s allies on the company’s board are now accusing Mr. Okada of violating American foreign-corruption laws.
These allegations of missteps include giving 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 normally rents for $6,000 a night and has amenities including his-and-hers bathrooms with showers built to accommodate six people at a time.
Mr. Okada’s camp, in turn, is questioning the propriety of a $135 million donation that Wynn Resorts made last year to the University of Macau — its chancellor is also the head of Macao’s government, with ultimate oversight of gambling. Mr. Okada’s litigation has prompted an inquiry by the United States.
Both sides deny wrongdoing. Mr. Wynn and Mr. Okada declined to be interviewed.
One source of friction is that Mr. Okada is pursuing his own casino business in the Philippines, through a company separate from Wynn Resorts. Mr. Okada’s going it alone originally had Mr. Wynn’s public blessing.
But shortly after Wynn Resorts decided early last year that it would not follow Mr. Okada into the Philippine gambling industry — whose reputation is questionable even by Asian gaming standards — the company started an investigation of Mr. Okada, conducted by a firm run by the former F.B.I. director Louis J. Freeh.
The Wynn Resorts board cited the reporting by the Freeh Group last week in explaining that Mr. Okada’s suspected blandishments to Philippine gaming officials, through use of Wynn hotels in Macao and Las Vegas, were grounds for drastic action: forcing Mr. Okada to leave the company and to sell back his nearly 20 percent stake at a 30 percent discount to the current stock price.
It may eventually be left to courts to decide whether either side has actually broken any laws, and whether — as Mr. Okada’s camp contends — Mr. Wynn is seeking to jettison the Japanese executive over behavior he has long abided because he no longer needs Mr. Okada’s money.
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