America at Large: When I first met Steve Wynn nearly two decades ago I was cautioned that he suffered from retinitis pigmentosa. The implication was that any comment on the fact that he was wearing sunglasses at breakfast would be better kept to myself, writes George Kimball

The casino mogul was then at the height of his involvement in the sporting world. He was about to stage the final instalment of the Sugar Ray Leonard-Roberto Duran trilogy in an arena behind his new Mirage Resort, and a year later would host a fight (against Buster Douglas) that would see Evander Holyfield win the first of his four heavyweight championships.

Wynn was at the time also obsessed with the construction of the opulent Shadow Creek Golf Club in the desert outside Las Vegas.

As originally conceived, Shadow Creek was an invitation-only facility. Unlike any other golf course built before or since, Shadow Creek was uniquely festooned with exotic flora and even more exotic fauna (wallabies imported from Australia, quail and pheasants), along with artificially created lakes and mountain streams, all cut out of what had been a hardscrabble desert wasteland.

When MGM tycoon Kirk Kerkorian bought out Wynn's Las Vegas interests in a hostile takeover half a dozen years ago, Shadow Creek went along with the package.

Guests at MGM properties are now allowed to play the course - assuming they can come up with the $500 green fee.

The expectation was that the retinitis would eventually result in total blindness for Wynn. That hasn't happened yet, but if Wynn always seemed to be a man in a hurry, it was at least in part because, whatever project he might have involved himself in, he could never be certain that he'd actually be able to see the result.

He had built the Mirage and neighbouring Treasure Island in the 1980s, at a time when many experts had concluded (erroneously, it turned out) that Las Vegas hostelries had already reached saturation point, and after succeeding with those family-themed resorts he went in the opposite direction with the construction of the Bellagio, an adults-only hotel and casino which housed his multimillion-dollar collection of fine art, one which included works by Cezanne, Gauguin, Manet, Matisse, Rembrandt, van Gogh, and Renoir, along with at least one Picasso and an original Andy Warhol ("My tastes," Wynn explained, "are quite eclectic").

He had, however, initially leveraged his empire through a public offering of junk bonds, which in turn rendered him vulnerable to his own ouster when MGM cannibalised his properties in 2000. Wynn lost his hotels and he lost his golf course, but he was left with his art collection and an obscene amount of money. In short order he had used the latter to establish yet another beachhead on the Strip, buying up Howard Hughes's old Desert Inn and undertaking the construction of the Wynn-Las Vegas on the site. That hostelry opened last year; with the deal came the historic Desert Inn Golf Course.

Included in Wynn's collection was Le Rêve, a 1932 Picasso painting of his then-mistress, Marie-Therese Walter. Wynn had bought the painting in 1997 for $48.4 million. When, nine years later, it had nearly tripled in value, he made the decision to cash in, and through a broker reached an agreement to sell the Picasso to New York collector Steven Cohen for $138 million - a figure which topped, by four million dollars, the highest price ever paid for a single work of art.

A few weeks ago, Cohen's representatives arrived in Las Vegas to inspect and authenticate the Picasso. That business out of the way, all that remained was the actual exchange of the money for the painting.

On the final weekend of his ownership, Wynn hosted a party in Las Vegas. Several friends had flown out from New York, and when the subject of the Picasso came up, Wynn invited the guests to come by his office the following morning to view the piece and bit it adieu.

The group duly assembled, and Wynn launched into an animated discussing of the artwork's nuances. Although the fact that Wynn can still see at all is a testament to the wonders of medical science, retinitis pigmentosa does severely afflict both peripheral vision and depth perception, including, but not limited to, the proximity of nearby objects.

As he spoke excitedly of the Picasso, and, perhaps, of his 138 million reasons for selling it, Wynn appeared to be shadow-boxing with his back to the painting. It was in the midst of these calisthenics that he undertook an emphatic gesture with his right hand.

The next thing his horrified guests heard was a distinctly audible ripping sound as Wynn put an elbow through the canvas.

The billionaire reacted precisely the way you or I might have. The first words to escape his lips were "Oh, shit!" "I can't believe I just did that," he said, quickly adding to the assembled company "I'm glad I did it and not one of you."

Wynn had to phone his broker and then Steve Cohen to tell them the deal was off. A few days later the Picasso flew east in his private jet. A New York art restorer has promised that in less than two months' time the damage will be all but undetectable to the naked eye.

But how much will it be worth? Now the word has leaked out, one supposes Le Rêve could turn out to be like some overstruck coin or stamp, rendered even more famous as "the Picasso Steve Wynn punched the hole in", but that consideration is, for the moment, immaterial.

Declaring the episode to have been "a sign of fate", Steve says he has decided not to sell the painting after all. Unless, one supposes, Kirk Kerkorian is interested.