Analysts: Don’t underestimate potential of Wynn UAE
In a 27 September analyst note, Morgan Stanley bumped Wynn Resorts to overweight or buy, based on low valuation and its huge potential in the United Arab Emirates (UAE).
The US-based gaming giant is developing a $4bn (£3bn/€3.6bn) beachfront resort on Al Marjan Island in Ras Al Khaimah, UAE which will include 1,500 hotel rooms, 60 townhouses and eight luxury suites, as well as restaurants, a meetings-and-convention space and an entertainment arena.
Significantly, it will also include the Persian Gulf’s first legal casino. Wynn is estimating that the Wynn Al Marjan Island will be open to the public in early 2027.
CEO Billings: gaming licence is “imminent”
According to Mirage Global, the “island masterplan” is “poised to emerge as a prominent tourist destination,” luring day trippers and vacationers from the other six emirates.
It will benefit from its proximity to the capital city of Dubai—about an hour’s drive away—and Dubai International Airport. In an August earnings call, Wynn CEO Craig Billings said the UAE gaming licence is due “imminently.”
Analysts say by 2030, within three years of opening, the property could generate $1.8bn in revenues and $500m in EBITDA. By contrast, Wynn Las Vegas, which opened in 2005, reaped $2.5bn in revenue and $945m in EBITDA in 2023.
Another benefit is though MGM Resorts has also applied for a casino licence in the UAE, Wynn will likely have a lock on gaming in the region for three to five years.
UAE “one of the best IR investment opportunities”
Wynn will host a discussion of the new market at the Global Gaming Expo (G2E) in Las Vegas in October. That announcement made JP Morgan analysts take note. A dedicated presentation “suggests that (Wynn is) looking to be incrementally visible on ways to generate shareholder value,” they wrote.
JP Morgan called the UAE “one of the best IR investment opportunities we have seen in a long time.” The Foreign Ministry touts the country’s political and economic stablity. The UAE also enjoys “robust” tourism and consumers who are willing to spend. Expats of 200 nationalities, who outnumber locals in the UAE, also will be important to Wynn’s customer base. Best of all, the company will have zero competition for gamblers as the operation ramps up.
“We are optimistic that investors will begin to ascribe some value for the UAE,” the JP Morgan team added.
Elsewhere in the UEA, the Game LLC was awarded the first ever gambling licence in July to operate as the UAE Lottery, offering a range of lottery games and other products “designed to cater to players’ variety of interests and financial preferences”.