JP Morgan Securities LLC analysts say they expect the United Arab Emirates (UAE) to release some form of gaming regulations before the end of this year, Focus Gaming News reported September 18.
Analysts Joseph Greff, Ryan Lambert and Samuel Nielsen said in a memo on September 15: “We view the establishment of the General Commercial Gaming Regulatory Authority (GCGRA) as a significant development.”
They continued, “We are encouraged by the GCGRA’s leadership team’s general industry expertise and ties to U.S. based gaming operators and regulatory agencies.”
The UAE has appointed former MGM Chairman and CEO Jim Murren chairman of the newly created board, the UAE News Agency reported several weeks ago. The same announcement included that Kevin Mullally had been named chief executive of the GCGRA.
The analysts concluded: “While the interest in UAE from U.S. gaming operators is not new, we see recent developments as a momentum-building event that, within the context of CEO public commentary from Wynn/MGM, makes us think that more news may come before year-end.”
They called the timing of a license, “fluid” because “much of the process requires educating lenders who have, until now, been unfamiliar with gaming and require clarity.” The Koran, the holy book of Islam, forbids gambling.
They noted that the licensing was likely to move in tandem with the financing: “Wynn is leading the syndicate of global and local banks through the preparation of what we expect to be circa $2 billion of leverage.”
One of the seven emirates, Ras Al Khaimah has partnered with Wynn Resorts Ltd. to build a $3.9 billion integrated resort, to be named the Wynn Al Marjan Island, on reclaimed land. Wynn has a 40 percent stake in the project and will be paid to manage the property. Besides a casino the property would also have a 1,500 room hotel.
In August Wynn Resorts CEO Craig Billings told investors that the company expects its gaming license “imminently” and that the resort could open in 2027.
CDC Gaming Reports noted that Greff said the project will add value to Wynn stock: “[W]e think investors will start to assess and ascribe the net equity value here.” He identified the region as the next growth area for casino gaming. He compared the market to Singapore because its tourist market “skews toward high ultra-wealthy travelers,” (largely from India, Saudi Arabia, the United Kingdom, China, and Oman) “restricts the casino floor to a small percentage of the overall resort footprint, and has little gaming competition in the area.” However, Greff doesn’t expect that factor to be true for long.
Dubai International Airport is 50 minutes’ drive from the Wynn site and the globe’s fourth-busiest airport.
MGM Resorts International also expects that it can be licensed to operate a casino in the emirates in Dubai. CEO and President Bill Hornbuckle last week told investors “We hope and believe… that we can push” a resort project “forward, up to – and including – gaming.” He added, “I can’t speak to the timing. I don’t know.”
MGM has been interested in developing a resort in the UAE for six years as part of the Wasl development group. It owns 150,000 square feet in Dubai that could be developed into a casino.
