Wynn Resorts Starts Construction on First Casino in the UAE
LISTEN TO THIS ARTICLE:Wynn Resorts is poised to make a significant mark in the United Arab Emirates (UAE) with the impending construction of the Wynn Al Marjan Island hotel tower. The project has broken ground, according to an update by the company, and will ultimately lead to the launch of a significant casino hub in the region.
The UAE’s Transformation
Situated on Al-Marjan Island, Wynn’s ambitious project aims to redefine luxury resort offerings in the region. The $4-billion endeavor is positioned to become the premier gaming destination in the Middle East.
Scheduled to open its doors by early 2027, the venture is a collaborative effort, with Wynn Resorts holding a minority stake. Financial risks are mitigated as the burden of the investment is shared among regional partners, Marjan LLC, and RAK Hospitality Holding LLC.
As construction progresses, the hotel tower's foundation is taking shape, paving the way for the structure's ascent. According to analysis by JPMorgan, the completed property will span 5.6 million square feet. Notably, any casino included in the plans would occupy just 4% of this space, reflecting Wynn's approach of prioritizing luxurious accommodations, entertainment, and culinary experiences over gaming.
Wynn Resorts' CEO, Craig Billings, has expressed unwavering optimism about the UAE venture, particularly in light of the company's strong fourth-quarter performance. This endeavor not only marks an expansion of Wynn's geographical footprint but also signifies its entry into novel markets, showcasing its commitment to innovation and growth.
UAE Key to Wynn’s Future
In a recent earnings conference call, Wynn executives highlighted the significant growth potential they foresee in the UAE. They emphasized that this expansion opportunity presents a chance to diversify the company's portfolio and extend its brand presence into untapped markets.
Wynn is positioned to be the sole casino operator in the UAE for the foreseeable future, providing it with a competitive advantage. However, regulatory frameworks for gaming operations in the region have yet to be established by the UAE's General Commercial Gaming Regulatory Authority (GCGRA). Analysts anticipate that once regulations are in place, there could be a double-digit tax rate imposed on gross gaming revenue, reflecting the government's approach to taxing the industry.
While the UAE's gaming landscape remains uncertain, the establishment of the GCGRA, led by Jim Murren, the former CEO of MGM Resorts International, signals progress toward developing gaming regulations. However, the approval necessary for Wynn to introduce casino operations in the UAE is still unclear, leading to market apprehension and impacting stock performance.
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