28 April 2023
Wynn Resorts is going big in the United Arab Emirates – literally and symbolically.
The company unveiled plans on Thursday for a $3.9 billion integrated resort development on the man-made Al Marjan Island in Ras Al Khaimah. Wynn first announced the project – the first legal gaming operation in the UAE – 16 months ago.
The centerpiece will include a 1,000-foot-tall hotel tower rising above the island’s shoreline next to the Arabian Sea.
The property will include multiple resort amenities, including 1,500 hotel rooms and suites and several high-priced villas with beachfront access. The property will have 24 restaurants and lounges and other non-gaming amenities, including 120,000 square feet of retail space and 100,000 square feet of convention and meeting areas.
The property’s casino will encompass just 4 percent of the property’s overall footprint of 5.6 million square feet.
With the UAE home to nearly three dozen buildings topping 1,000 feet, including Burj Khalifa in Dubai, which is the world’s tallest building at 2,717 feet, Wynn CEO Craig Billings wanted the design to stand out in the region noted for its unique architectural buildings and monuments.
“We have spent the past year meticulously programming and concepting Wynn Al Marjan Island, carefully considering its unique location,” Billings said in a statement. “I am incredibly proud of our design and development team’s ability to impart our legacy of rich, thoughtful design into a sun-soaked beachside resort that will delight customers, new and old.”
In an interview with The Nevada Independent last summer, Billings said the Ras Al Khaimah project would put “95 percent of the world’s population within an eight-hour flight of the Wynn brand.” He said the international airport in nearby Dubai sees more than 80 million passengers a year.
The company said the property’s configuration would match the curved shape of the beach on the island, which creates ocean views from throughout the resort.
Other than the 1,149-foot-tall STRAT Hotel Casino and Skypod, Wynn Al Marjan Island will be taller than any hotel-casino in Las Vegas, including the 631-foot Encore at Wynn Las Vegas. The property will also eclipse the 679-foot-tall Marina Bay Sands in Singapore.
Deutsche Bank gaming analyst Carlo Santarelli told investors the UAE property could add $10 to $14 a share to Wynn’s stock price by the time the property opens in 2027. Shares of Wynn closed Friday at $114.28 on the Nasdaq.
“In our view, the project is well positioned to generate strong returns, given 22 million annual tourist visitors to the UAE and population of 10 million, 90 percent are [not UAE citizens],” Santarelli wrote in a research note.
Rendering provides a view of the planned $3.9 billion Wynn Al Marjan Island in the United Arab Emirates. The project is expected to open in 2027. (Photo courtesy of Wynn Resorts)
Under UAE gaming regulations that were enacted more than a year ago, Wynn Al Marjan Island would be regulated similarly to the two casinos in Singapore.
The regulations include different tax rates for casino play based on high-end (5 percent) or mass-market game type (15 percent), and a fee to enter the casino. Also, UAE citizens, who make up 10 percent of the country’s population, wouldn’t be allowed to enter the gaming portion of the facility because gambling is forbidden in Muslim culture.
“Given the relatively low tax rate, we expect property [cash flow] margins to be above those experienced in Macau, though likely below those of Singapore,” Santarelli wrote.
CBRE Equity Research gaming analyst John DeCree said Wynn’s forecast of $450 million to $600 million of property cash flow from UAE property compares favorably to the company’s results from Encore Boston Harbor and Wynn Palace in Macau.
“However, given the many advantages of the location in the UAE, including demographics, wealth, tourism, and the fact that Wynn Al Marjan might be the only game in town, we believe the long-term earnings potential could be even greater,” DeCree wrote in a research note.
Two Nevada-based casino operators already have non-gaming locations in the UAE and other gaming companies are reportedly exploring the possibility of entering the region.
Caesars Entertainment opened Caesars Palace Dubai and MGM Resorts International is part of a development that will include two branded hotels under MGM Grand and Bellagio names and a collection of MGM Signature villas.
Al Marjan Island is part of a group of four islands and Wynn is developing the resort with local partners Marjan LLC, and RAK Hospitality Holding LLC.
Ras Al Khaimah is considered one of the fastest-growing tourism markets in the Middle East-North Africa region.
Updated on 4/28/2023 at 1:16 p.m. to reflect the closing stock price of Wynn Resorts.
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