UPDATE 2-Wynn Resorts in Massachusetts allowed to drop Wynn from license

(Adds background on Wynn)

BOSTON, May 7 (Reuters) - Massachusetts' gambling regulator on Monday said it will allow Wynn Resorts Ltd to remove founder Steve Wynn's name from its license for a planned $2.5 billion casino following allegations that Wynn subjected women who worked for him to unwanted sexual advances.

The Massachusetts Gaming Commission's decision came as state regulators investigate the allegations as part of a process that could affect whether Wynn Resorts continues to be deemed suitable to retain its 2014 casino license.

The five-member commission ruled that Wynn no longer be considered a "qualifier" for the purposes of its license upon confirmation that he did not exercise voting rights at the company's upcoming May 16 shareholders' meeting.

Qualifiers, who must pass a state background check, can include top executives and shareholders. The commission can factor in character, reputation and integrity to determine if a casino operator is suitable to hold a license.

"We are pleased with the Gaming Commission's decision and look forward to having nothing further to do with this matter," Brian Kelley, a lawyer for Wynn at the law firm Nixon Peabody, said in a statement.

Wynn Resorts did not immediately respond to a request for comment.

Wynn, the Las Vegas-based company's long-time face, resigned as chief executive in February after the Wall Street Journal reported on allegations that the billionaire had engaged in a decades-long pattern of sexual misconduct.

The newspaper said former and current company staff members it interviewed accused Wynn of creating a hostile work environment for women and of regularly pressuring employees to perform sex acts.

Reuters has not independently verified the allegations. Wynn, 76, has called the accusations "preposterous."

In March, Wynn divested himself of his entire 11.8 percent stake in Wynn Resorts. As a result, lawyers for the company and Wynn argued the Massachusetts commission should no longer deem him a "qualifier" for the purposes of its casino license.

At an April 27 hearing before the commission, Wynn Chief Executive Matt Maddox detailed steps the company has taken to distance itself from its namesake and adjust its corporate culture.

He also announced that the company was removing the name "Wynn" from the casino it is building in Massachusetts by changing the name of the Wynn Boston Harbor project to "Encore Boston Harbor."

The resort under construction in Everett, Massachusetts, adjacent to Boston along the Mystic River, will have more than 600 hotel rooms. The company expects it to open in mid-2019. (Reporting by Nate Raymond in Boston; editing by Leslie Adler and Jonathan Oatis)