Posted on: September 5, 2024, 07:10h.
Last updated on: September 5, 2024, 07:10h.
Wynn Resorts’ (NASDAQ: WYNN) plan to build the United Arab Emirates’ (UAE) first casino resort is widely known — construction is already underway — but investors have yet to ascribe much value for that project into the share price.
They may want to rethink that view because there are emerging signs there’s momentum for Wynn Al Marjan Island integrated resort in Ras Al Khaimah. For example, Wynn management is hosting an investor day in Las Vegas early next month. In a new report to clients, JPMorgan analyst Joseph Greff said that could be a positive sign because it could imply UAE regulators are preparing to officially approve casino gaming.
The fact that management is willing to host a three-hour investor meeting could likely imply that regulations and licence issuance are imminent,” wrote Greff. “We don’t look at this as a derisking event, but rather one in which equity investors can start to ascribe the currently discounted equity value related to the project.”
The General Commercial Gaming Regulatory Authority (GCGRA) — the United Arab Emirates’ (UAE) first gaming regulatory agency — was formed last year and in July, group approved a lottery license for an Abu Dhabi-based company. That sparked hope the authority would sign off on a casino license for Wynn. Some investors are waiting on that approval because the economics of Wynn Al Marjan Island are significantly more attractive when a casino is included.
More Positive Signs for Wynn UAE Casino
Potential near-term approval a gaming license for Wynn in the UAE could be a boon because competitors are eager to test their look in the region. The Wynn property is scheduled to open in early 2027, indicating that it would have a temporary monopoly should it win a casino permit because it’s further along than any venue that could be considered competition.
Wynn Al Marjan Island is poised to become the first regulated casino resort anywhere in the Arab world — a status not lost on analysts and investors. That makes optics and public relations, particularly among locals, critical because wagering isn’t viewed in a favorable light in many countries in the region. Data indicate attitudes are shifting in the UAE.
“In September 2023, the UAE establishing the General Commercial Gaming Regulatory Authority (GCGRA), signaling the country’s intent to regulate and potentially legalize certain forms of gambling. Since that announcement, public curiosity has surged, with online searches for gambling-related terms increasing by 54.38%,” according to Dubai Casinos.
The research group added that, on average, each marquee news event pertaining to wagering in UAE sparks a 12.54% increase in related internet searches among citizens of the emirates.
Interest Is There for UAE Casinos
While Wynn Al Marjan Island is positioned as a tourist destination with gaming space occupying a scant percentage of overall square footage, it’s clear there’s burgeoning interest among locals in land-based gaming venues.
“This is evident in the steady search volume for ‘Casino in Dubai’ and ‘Ras Al Khaimah Casino,’ suggesting that the public is eager to learn more about the possibility of brick-and-mortar gaming venues in these areas,” added Dubai Casinos.
Regulators haven’t commented on whether or not there will be limitations on local visitation to UAE gaming venues, but that could be a difficult, impractical task owing to the vast oil wealth in the emirates.
