Wynn's Wake-Up Call
The fall of Steve Wynn is a wake-up call for the global casino industry.
Gambling has traditionally gone hand-in-hand with seamier activities, and sexual politics that would be considered unacceptable in other sectors have long been tolerated.
Wynn's resignation Tuesday from the company he built -- following a Wall Street Journal report alleging he had pressured employees for sex -- shows how, as Gadfly argued last month, investors need to start considering this as much of a financial risk as a reputational one.
Men are about twice as likely to be problem gamblers as women, and parting them with their money has ever depended on keeping their lizard brain engaged. At the same time, the tendency to treat men as customers to be wooed and women as eye candy to be viewed has been remarkably persistent, even as the casino industry has transformed itself. As Sarah Harrison, chief executive of the U.K. government's Gambling Commission told an industry conference in London Monday:
This is an industry where we have a number of talented, powerful and successful women ... Yet from walking around the exhibition you wouldn't know this. Instead you saw men representing their companies wearing expensive tailored suits whilst their female colleagues were expected to wear nothing more than swimsuits.
The blind spot is particularly strange when you consider how long the mantra in Las Vegas and Macau has been about drawing in mass market tourists -- driven as much as anything by Wynn's own determination to add non-traditional activities like art galleries and fine dining to the sin city entertainment mix.
One explanation can be found by looking at where women are employed. While there are plenty of jobs for women as waitresses and croupiers, far too few rise to the levels at which they have the power to make a change.
Among the top 25 casinos by market capitalization, 10 have no women directors on their boards at all. 1 Just six have representation that's higher than one-in-five: Crown Resorts Ltd., Star Entertainment Group Ltd. and SkyCity Entertainment Group Ltd. in Australia and New Zealand, Hong Kong junket operator Kingston Financial Group Ltd., plus Boyd Gaming Corp. and Penn National Gaming Inc. in the U.S.
Compare that to the superficially similar hotels and cruise lines industry and the contrast is stark: Just four of the top 25 hotel and cruise companies lack women directors, and the median board representation is 20 percent. While that's far from perfect, it's double the 10 percent ratio at casinos.
Change is long overdue. Women make the purchasing decisions when it comes to more than 90 percent of vacations. Plenty of women (and men) consider the push-up-bra and minidress vibe of resort bars and gaming floors a primary reason to avoid spending time in them, but companies appear oblivious to the way they're driving away potential customers.
Of all businesses, casinos should know when they're leaving money on the table.
We've focused on board data because more comprehensive information is patchy. Of the 196 casino and gaming companies for which Bloomberg collects gender-balance data, figures for women's workforce and management representation is only available in 15 cases -- and just five or six of that number are casinos.
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Katrina Nicholas at firstname.lastname@example.org