CBRE Foresees $1.38B Annual GGR for Wynn’s UAE Resort

Las Vegas and Macau have long been the two premier global gaming markets. The UAE, nestled in between them, is now piquing the interest of analysts and investors alike—some think it could be the next multibillion-dollar market.

CBRE Foresees $1.38B Annual GGR for Wynn’s UAE Resort

A report by CBRE Institutional Research foresees a golden future for Wynn Resorts’s Wynn Al Marjan Island in the United Arab Emirates. CBRE sees the IR generating $1.38 billion annually in GGR and net revenues of $1.8 billion, Inside Asian Gaming reported June 6.

The report, “United Arab Emirates: The next gaming frontier” was generated by analysts  John DeCree, Colin Mansfield, Connor Parks and Max Marsh, who described themselves as “more bullish” after visiting the property. Some see the overall market burgeoning as a new Las Vegas. “We believe the UAE represents one of the most compelling opportunities in global gaming,” they wrote.

It came out as Wynn took the wraps off the first design images for the resort. The analysts base the healthy profit outlook on the important fact that Wynn will be quite literally opening a new gaming frontier in a Muslim region where, until recently, gambling was considered to be forbidden by the Koran. There is no competition in the region.

The Wynn property will have a 1,000-foot hotel tower with 1,542 rooms, suites and 22 high-priced beachfront villas, 22 restaurants and lounges and retail and meeting spaces.

The analysts wrote: “With a population of 9.7mm people (~88% expats), a robust tourism industry with ~25mm annual visitors and a high propensity to spend, virtually no gaming competition in the region, and an expectation for an operator-friendly regulatory regime, the UAE presents one of the best IR investment opportunities we have seen in a long time.”

The report projects profits of about $356 million by 2030 for the UAE resorts with EBITDAR estimated at US$921 million annually. The analysts expect the resort to hit full stride and stabilize profits within three years of opening.

However, they added, “. . .it could be much quicker. We have seen first-to-market properties like Marina Bay Sands and Sands Macao ramp much quicker given the historical lack of gaming supply in those markets.”

The report also emphasizes the importance of margins when analyzing the UAE’s growth potential.

CBRE wrote: “We have seen consensus forming in the mid-30% property margin range for Wynn Al Marjan Island and other IRs in the UAE.” It added,  “However, with an expected tax rate and regulatory regime that would rival Singapore and Las Vegas, relatively favorable labor conditions (compared with quotas in Macau and unions in Las Vegas), and virtually no competition, we would expect operating margins to be more akin to Singapore (50% range) than Las Vegas.”

The untapped market will be made tappable if bans on gambling are lifted in the UAE where 74.5 percent of the population professes Islam, which teaches that gambling is harmful.

Each of the seven emirates have some degree of autonomy and the UAE itself is creating a gaming regulatory infrastructure that would allow each of them to host an integrated resort to include a casino, hotel, dining, entertainment, and other non-gambling amenities.

The Wynn resort, which is being built as a non-gaming resort that could quickly switch to gaming, is rising on the man-made Al Marjan Island in Ras Al Khaimah, the Nevada Independent reported.

The Ras Al Khaimah emirate  “handpicked” Wynn, which first announced the construction of the $3.9 billion resort in 2022. Dubai and Abu Dhabi are the emirates most often mentioned for future developments.

When all three emirates are included, CBTR estimates they have the potential to generate $8.6 billion in annual gaming revenue, compared to $8.4 billion produced last year by the 25 top properties on the Las Vegas Strip.

The developers also hope to drive the new customers from this market to their Las Vegas resorts, as well.

Analyst Colin Mansfield told the Nevada Independent, “The UAE is a way to expand your brand’s global reach with a new market that’s potentially never seen or visited Las Vegas.” He added, “We like the financial aspect of diversifying cash flows.”

Analyst John DeCree added that the existing luxury hotels—with their 200,000 rooms— and eateries in the region could eventually develop as Las Vegas has, into a market where non-gaming activities account for two-thirds of the money spent.

He declared, “I think it is reasonable to expect the UAE will be the Las Vegas of the Middle East,” concluding, “a high propensity for luxury and consumer spending, a business-friendly operating environment, strong existing transportation and lodging infrastructure, and virtually no gaming competition.”

DeCree compares UAE’s potential to Singapore, which has two IR’s operated by Las Vegas Sands and the Genting Group, where 40 percent of the revenue comes from non-gaming spending.

For this to happen, the UAE will have to end its ban on gaming, which experts expect to follow the UAE’s relaxation of the prohibition against alcohol consumption by non-Muslims in 2020. This could follow a federal decree or action by the UAE legislature—which CBRE expects within months.

CBRE speculates that they may have already taken place and been signed but just not yet published. “We wouldn’t necessarily expect a very public announcement,” says the report.

The UAE has already created the General Commercial Gaming Regulatory Authority (GCGRA) with former MGM Resorts chairman and CEO Jim Murren as board chairman and former Executive Director of the Missouri Gaming Commission Kevin Mullally as CEO.

Last fall Murren told the Independent, “We foresee an operator-friendly framework” for the market.

MGM Resorts International has partnered with an asset management group to build a 25-acre non-gaming resort in Dubai. MGM’s CEO Bill Hornbuckle has said, “The UAE is a fascinating opportunity.”