The tycoon who couldn't tell his art from his elbow

Steve Wynn has sharp elbows. How else would he have risen to become one of the most successful and wealthy casino moguls in the world? But should you bump into him, it would be best to avoid all mention of arms, elbows and other limbs.

If Mr Wynn - whose newest property, simply called Wynn, is the most luxurious casino/hotel on the Las Vegas strip - is a little sensitive on the subject it may have something to do with a most ghastly incident that occurred in his office at the Wynn earlier this month. It involves a priceless Picasso and a large hole.

The Picasso in question is Le Rêve, the 1932 portrait of the artist's mistress Marie-Therese Walters, which is among his best-known masterpieces. It is one of numerous important canvases owned by Mr Wynn, many of which have adorned his casino resorts. They give the establishments a sheen of class.

But among all those in his collection, Le Rêve held a special place in his heart. He nearly named the Wynn after it, presumably before vanity demanded otherwise. Instead the Cirque de Soleil show that is in residence there is called Le Rêve. He bought the Picasso picture in 1997 from another collector for $48.4m.

Priceless, in fact, is not quite accurate. For Mr Wynn recently agreed to sell the painting to a Connecticut hedge fund billionaire, Steven Cohen, for $139m. Such was his excitement over the sale - the most money ever offered for a single painting - he bubbled forth with the news to some pals who had arrived in town at about the same time.

Disaster loomed when Mr Wynn invited these friends, among them the writer Nora Ephron and the broadcaster Barbara Walters, to visit his office to view the Picasso before it left for Connecticut. They stood politely and gaped as Mr Wynn gushed about the work and its history.

In an online blog Ms Ephron, described the moment that Mr Wynn took a couple of fateful steps back. He is a man prone to extravagant gesticulations and somehow his elbow made contact with the canvas, specifically with the left forearm of Picasso's curvaceous mistress.

"His elbow crashed backward right through the canvas," Ms Ephron writes. "There was a terrible noise." If at first no one in the room knew where to look, there was really no ignoring what their host had done. There, says Ms Ephron, was "a black hole the size of a silver dollar - or, to be more exactly, the size of the tip of Steve Wynn's elbow - with two three-inch long rips coming off it in either direction".

Mr Wynn, who is 64, suffers from a disease called retinitis pigmentosa, which means he has trouble with peripheral vision. It might explain his moment of most colossal, not to mention costly, clumsiness.

"Oh shit, look what I've done," he finally muttered to his guests, according to Ms Ephron, before adding, "Thank God it was me." He then telephoned his wife, Elaine, and said: "You'll never believe what I've just done."

All present agreed to tell no one what had happened. At least that would allow their host time to break the news gently to Mr Cohen in Connecticut. It was clear, of course, that Le Rêve had become damaged goods and the sale of the painting was in serious jeopardy. Someone's resolve broke, however - as always happens - and snippets of what had happened reached a New York tabloid, prompting Mr Wynn to confess to a writer from The New Yorker. He described a ripping sound as his elbow did its work. "We all just stopped. I said: 'I can't believe I just did that. Oh, shit. Oh, man.'"

Today, Le Rêve is in the hands of a restorer in Manhattan who has promised that, given eight weeks or so, it can be returned to its pre-elbowed state. Steve and Elaine Wynn have decided meanwhile that the accident was fate's way of telling them not to sell the picture. So they will keep it and Mr Cohen is left to nurse his disappointment.