Wynn Resorts Expects UAE License, MGM Cautious About Gambling Legalization

August 17, 2023
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Two U.S. gaming giants continue to move forward with major investments in resort projects within the United Arab Emirates (UAE), albeit one will include a casino while the other will be non-gaming unless authorities in Dubai or on the federal level approve gambling in the future.

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Two U.S. gaming giants continue to move forward with major investments in resort projects within the United Arab Emirates (UAE), albeit one will include a casino while the other will be non-gaming unless authorities in Dubai or on the federal level approve gambling in the future.

CEO Craig Billings recently assured investors and analysts that Wynn Resorts expects to be licensed “imminently” as it continues to oversee construction of a multi-billion-dollar integrated resort on a man-made island.

The $3.9bn resort is set to open in late 2026 on the man-made Al Marjan Island in Ras Al Khaimah, the northern most emirate in the UAE, which is dominated by Dubai. It is the first resort development in any of the seven emirates to include legalized gambling.

Billings described the UAE as the “most exciting new market opening in decades.”

“Our 40 percent equity ownership and management fees will drive a very healthy [return on investment] for Wynn Resorts shareholders,” Billings told analysts during a quarterly earnings conference call on August 9.

Wynn is partnering with Al Marjan Island LLC and RAK Hospitality Holding on the beach-front integrated resort that will feature 1,500 rooms, 24 food and beverage outlets and a convention center. The gaming area will comprise 4 percent of the 5.6m-square-foot property.

The company did not discuss its investment in the project, which was publicly announced on April 27, but listed $1.22bn spent during the quarter on land and improvements in a 10-K filing with the U.S. Securities and Exchange Commission.

Billings said that Wynn and its partners “have everything we need to operate gaming in Al Marjan.”

There remains confusion among analysts and investors because of lack of understanding regarding individual emirates versus the UAE as a whole, he said.

“There may be conversation in other emirates about legalization or legalization at the federal level, thereby covering all emirates,” he said. “I expect that we will have our license for Ras Al Khaimah actually imminently.”

Billings stressed that there was no concern that there is a legalization process that needs to be completed in order for gaming to occur in Ras Al Khaimah.

Wynn currently operates casino-resorts in Las Vegas, Boston and Macau.

In terms of international expansion, rival MGM Resorts International has been focused for more than a decade on building an integrated resort in Osaka, Japan. Currently, the company expects to begin construction some time next year.

“In Japan, the next step is entering into an implementation agreement with the central government, which we … expect in the fall,” CEO Bill Hornbuckle told analysts on August 2.

MGM also has been busy with a project with Wasl Asset Management Group in Dubai where the company will manage the non-gaming property, but there is a 150,000 to 200,000 square feet space that could be used for a casino. The 1,000-room hospitality project is being built on a man-made island called Proto island.

Hornbuckle did not discuss the company’s joint venture in the UAE during the second-quarter earnings call.

Since the beginning of the year, however, the MGM boss has made it clear in conversations with analysts and reporters that any legalization of gaming in the UAE as a whole was up to Abu Dhabi and the national government to decide.

Hornbuckle said he realizes that each emirate might have a different position on allowing gambling.

“Time will tell with what ultimately happens in terms of gaming,” Hornbuckle told the Las Vegas Review-Journal in an interview published July 22.

“There’s been consideration and conversation and we’re following it closely,” he said. “But for now, hospitality is our key focus there and we’ll see what the government does. If they activate, we’d love to participate.”

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