Testing the waters with the announcement of the Wynn Al Marjan Island, the UAE government has gone to the deep end, announcing a federal level gaming authority. Chaired by the former CEO of MGM, this new authority sets the stage for a full-blown gambling industry.
The United Arab Emirates has established the General Commercial Gaming Regulatory Authority, known as the GCGRA, a federal-level entity to regulate and establish “strict guidelines” for the country’s commercial gaming industry. The GCGRA sets the scene for future casinos where Ras Al Khaimah already has the confirmed Wynn resort; a potential “Arabian Strip;” and gaming in other emirates, including Dubai and Abu Dhabi.
The Authority will be led by Kevin Mullally as CEO, with a board of directors being chaired by Jim Murren. Both Mullally and Murren come with a top pedigree in the casino industry.
Mullally was previously with New Jersey’s Gaming Laboratories International, a company that specializes in testing and certifying gaming equipment. Mullally was its VP of government relations and general counsel for a decade. He has also spent 12 years with the Missouri Gaming Commission.
Murren is the former chairman and CEO of MGM Resorts, a role he held from 2008 to 2020. He was also chairman of the American Gaming Association from 2014 to 2017.
UAE state publication WAM said the GCGRA would “create a socially responsible and well-regulated gaming environment” and “facilitate unlocking the economic potential of commercial gaming responsibly.”
According to Bloomberg Intelligence, the UAE could make $6.6 billion in revenue annually from gaming.
Taking A Gamble With The Costly Wynn
Rumors of gambling in the emirates have been around for years. It wasn’t until the announcement of the Wynn Resort in Ras Al Khaimah – approximately a 45-minute drive from Dubai – that the actual possibility of gaming came into view.
In August, Wynn’s CEO Craig Billings spoke about the upcoming resort Island: “We have everything we need to operate gaming in Al Marjan. I expect that we will have our [gaming] license for Ras Al Khaimah actually imminently.”
The behemoth Wynn Resort is scheduled to open in 2027, located on the emirate’s man-made Al Marjan Island. With more than 1,500 rooms, 24 restaurants and a cost of $3.9 billion to build, the resort is so immense for Ras Al Khaimah that its construction may put the local economy in a fiscal deficit.
Fitch Ratings said in a May 2023 report that the resort will “weigh on public finances initially.”
But in the long run, the government-backed property could boost the economy with what is being dubbed by analysts as the “Wynn Effect.”
According to Colliers International, the city will welcome over 3.8 million visitors by 2027 and 5.5 million by 2030.
The gross gaming revenue tax rate is expected to be between 10 and 12% on the Wynn.
Adjusted EBITDA for the resort is expected to reach up to $600 million a year, according to Wynn’s own estimates. By comparison, the long-standing Wynn Las Vegas, took in $801 million adjusted EBITDA in 2022.
An Arabian Strip
The announcement of the Wynn in the Northern emirate sparked a luxury boom in the area. The likes of Nobu, W Hotels, and Le Meridien have all been announced on the same Al Marjan Island since the Wynn was unveiled in January 2022.
This influx of new five-star supply can only be good news for the Las Vegas execs of Wynn. Trademark filings made by the Nevada company include the “Arabian Strip” and the “Marjan Strip,” a potential Las Vegas Strip-style recreation in the Middle East.
The Wynn Al Marjan Island deal is between Wynn, island developers Marjan Island LLC, and government-owned RAK Hospitality Holding LCC.
At the end of August, RAK Hospitality Holding bought another hotel on Al Marjan Island: The Accor-managed Marjan Island Resort & Spa. Now government-owned, the property could breeze through lengthy regulatory reviews to set up gaming.
Wynn Resorts may manage other hotel brands in the region. In a first for Wynn, RAK Hospitality is paying Wynn “for what it knows,” akin to a hotel management agreement. This agreement could give Wynn the room to manage an entire portfolio of hotels on the island, bringing to life the “Arabian Strip.”
On this topic, Billings said in the April 2023 webcast that Wynn is looking at opportunities for additional developments around the Wynn. He said: “We and our partners are in active discussions around those adjacent parcels [of land] and I expect additional hotels will act as a powerful feeder to Wynn Al Marjan Island.”
There is also potential for Encore sister hotel – similar to Wynn and Encore in Las Vegas – since Wynn Resorts has registered the ‘Encore Marjan Island’ trademark as well.
Potential Gaming Locations in Dubai
In Dubai, various integrated resort brands are established or in the works. In 2018, Caesars Palace entered Dubai with its first non-gaming resort; owned by Meeras, which is a part of the emirate ruler’s own Dubai Holding, the resort also comes under the watch of the government. Like the Wynn, it is offshore, on Bluewaters Island.
Since it opened, people have speculated if and when Caesars would run gaming in Dubai.
Caesars Entertainment CEO Tom Reeg raised the idea in the group’s Q4 2021 earnings call: It was “the original thought when Caesars struck that deal in Dubai that maybe ultimately the UAE would have gaming that is a Caesars Palace in Dubai that we manage.”
He added: “So if there’s an opportunity, you should expect that we would be active and our brand and building is already open.”
MGM Resorts has its own property in the works in Dubai. MGM Resorts first announced plans for a resort, without gaming six, years ago. More recently, MGM seems to have flipped sides and now wants gaming.
CEO William Hornbuckle said earlier this year on a conference call: “As it relates to Dubai, that property continues to evolve. The owners want to upgrade the property, I think, with gaming in mind. But it’s up to Abu Dhabi and the national government to ultimately decide … We’re hoping ‘any day.’ But I got to believe as the summer fulfills itself, we’ll hear more news on that.”
While the MGM in Dubai isn’t outright owned by any government entity, it was launched by the ruler of Dubai, and is owned and developed by Wasl, a firm with close ties to government.
Another Dubai mega-resort many think would have gaming is Atlantis, The Palm and/or Atlantis, and The Royal. Owned by Kernzer, which the Dubai government has a 46% stake in, the resorts are run by a company that launched itself with an Atlantis casino in the Bahamas.
Kerzner handed over its Bahamas-based Atlantis Paradise Island in 2014 but still owns a casino resort in Morocco called Mazagan Beach Resort.
Following the announcement of the Wynn and the floodgates that it opened in terms of gaming, Atlantis Dubai execs have been hesitant to discuss the possibility of gaming. Many of the two resorts’ leaders come from the gaming world, including managing director Timothy Kelly who was the SVP of operations for Wynn Palace in Macau and the VP of hotel operations at MGM Grand before that.
On August 23, 2023, Kernzer International Limited filed a trademark for the ‘Atlantis’ name, this time for the purpose of “providing casino facilities.”
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