Middle East’s first licensee Wynn talks up $5bn UAE gaming opportunity

Wynn announced Friday (4 October) it received the UAE’s first commercial gaming licence from the General Commercial Gaming Regulatory Authority (GCGRA) late last week. Construction is underway and its Wynn Al-Marjan Island property in Ras Al Khaimah is already several storeys high. It has a significant headstart on the competition.  

Wynn Al-Marjan Island revenue projections top $1.88bn

And now the operator has highlighted the scale of the opportunity in an investor presentation held today (8 October) in Las Vegas.

Wynn expects a UAE gaming market to be worth $3bn to $5bn. For its property in RAK, it projects gross gaming revenue in the range of $1bn to $1.67bn, with a base expectation of $1.33bn. 

It will pay a blended tax rate of 10% to 12% of GGR, it said. In terms of other major IR destinations, this means the UAE is most comparable to Singapore, which has a tiered GGR tax of 8% to 12% for VIP players (rising to 18% to 22% of GGR for mass). 

As a blended rate, however, it does not confirm the rates for specific products. However it suggests a tax rate lower than early figures seen by iGB. Those suggested a 25% GGR levy for slots and 18% for tables, and an 8% rate for VIP players. 

Adjusted property EBITDA is expected to fall in a range of $390m to $570m, with adjusted property EBITDAM of 36% to 43%. The resort will generate free cash flow between $170m and $350m. 

The total cost of the project including land, fees and capitalised interest is projected to come to $5.1bn. Wynn’s equity contribution will come to $1.08bn (a 40% share), and it aims to complete a $2.4bn debt raise by the end of the year. This is already oversubscribed, with strong demand from local and international lenders, Wynn said.

The customer base for Wynn’s UAE casino

This $1.33bn base expectation for GGR shakes out into revenue from three core player segments. Core to this is the ‘international VVIP’ segment, comprising ultra high-net-worth international customers. Wynn expects this group will contribute 37% of GGR.

Around 75% of the world’s population is within an eight hour flight of Wynn Al-Marjan Island. It has over 100,000 existing gaming and non-gaming customers in its global database. Daily spend for these players is three times higher than gaming customers in the Wynn Las Vegas database.

International tourism will make up 29% of the $1.33bn GGR total. The property sits on a cluster of man-made islands located 20 minutes from the Ras Al Khaimah International Airport, and 50 minutes from Dubai International Airport. 

Overnight visitation to Ras Al Khaimah is expected to grow rapidly in the coming years. For 2023, an expected 4.3 million overnight visitors came to the Emirate. That will grow to 9.6 million by 2030, according to the RAK Center for Statistics & Studies. 

The final 34% will come from domestic visitors. The UAE is an untapped market for integrated resorts, with a potential player base of nine million non-Emirati residents. And it’s a “magnet” for high-net-worth individuals Wynn said. More than 6,700 millionaires are expected to relocate to the UAE in 2024 alone.

Strong non-gaming revenue from amenities such as high end dining and retail means Wynn projects operating revenue ranging from $1.375bn to $1.875bn with a base expectation of $1.625bn. 

The higher end of Wynn’s market size projections would put UAE gaming just behind Singapore’s GGR of $6bn, and not far off the Las Vegas Strip’s $8.9bn. 

When will Wynn Al-Marjan Island open?

The UAE’s first integrated resort is on track to open in 2027, with the property’s tower to top out in Q4 2027. Interiors, furniture, fixtures and equipment will be installed over the next year, with pre-opening scheduled for the first quarter of 2027. 

Upon completion the property will feature a hotel with 1,542 rooms, including 297 suites, six townhouses and 22 villas, as well as a 225 square foot gaming floor. It will also house 16 restaurants, six bars and lounges, as well as luxury retail and conference space.

While it’s likely to be the first in the region, others are already circling. MGM Resorts chief executive Bill Hornbuckle told attendees of a Skift conference in September that the operator had applied for a licence in Abu Dhabi. 

The GCGRA has not confirmed any other licence applicants, nor has Abu Dhabi commented publicly on gaming developments. 

MGM did partner Wasl Hospitality and Leisure in 2017 to advise on a luxury resort development on Jumeirah Beach. The development will feature the MGM, Bellagio and Aria brands and 1,500 hotel rooms, though Dubai is also keeping quiet on any plans for gaming developments.

Wynn said it ultimately expects two other competing properties to enter the UAE casino market. Regulations limit each Emirate to a single casino.