Wynn Resorts Provides UAE Update, Casino Could Be Bigger than Las Vegas
Posted on: November 10, 2022, 05:19h.
Last updated on: November 10, 2022, 05:50h.
On its third-quarter earnings conference call late Wednesday, Wynn Resorts (NASDAQ:WYNN) provided analysts and investors with an update on its upcoming integrated resort on Al-Marjan Island in the United Arab Emirates (UAE).
The project was announced earlier this year and is expected to be open at some point in 2026. On the call, Wynn CEO Craig Billings said the company expects to publicly share plans and renderings of the UAE-integrated resort early next year, confirming that a casino will be a part of those efforts. Casino gaming has long been off-limits in UAE. But when the Al-Marjan venture was unveiled in January, it wasn’t immediately clear that a casino would be permitted.
The casino component, where at least for some period of time, we will be operating on our own, which makes it quite exciting, is shaping up to be somewhat larger than Wynn Las Vegas,” said Billings on the call in a response to a question from Deutsche Bank analyst Carlo Santarelli.
The Wynn chief executive office is “bigger” than Wynn Las Vegas, which refers to square footage or the UAE-integrated resort’s profit and revenue potential. Wynn Las Vegas is the operator’s flagship US gaming venue.
UAE Essential to Wynn’s Diversification Efforts
Wynn is partnering on the project with RAK Hospitality Holding LLC — a local hotel developer — and it’s estimated that the US company’s stake will be around a third. HKS Architects said it will be the architect for the Wynn property. The firm designed Venetian Macau, Palazzo Las Vegas, and Atlantis Paradise Island in the Bahamas.
The operator hasn’t publicly stated the venture’s price tag. But analysts estimate it to be around $2 billion, forecasting Wynn can generate a 20% return on investment. What’s clear is that the UAE plan is pivotal in terms of bringing needed geographic diversification to Wynn’s portfolio.
That’s particularly true at a time when the company’s Macau operations remain a drag on overall performance. Wynn’s third-quarter results were another case of solid showings in Las Vegas and Boston, and disappointment in Macau.
Currently, Al-Marjan Island is the only one of the seven emirates where wagering is permitted, indicating Wynn’s property could be a quasi-monopoly for some time.
Wynn Could Open UAE Doors
While Wynn could be a player for a New York City casino license, UAE remains the focus of its international expansion efforts.
“So we’re very focused right now on the UAE and getting that right. It’s a tremendous, very high return opportunity for us, we expect. And so that’s really the sign of our — that’s really the focus of our design and development efforts at the moment,” added Billings.
Wynn’s progress in UAE is likely to be closely monitored by rivals because the region is viewed as one of the last untapped casino frontiers in the world.
Rival Caesars operates a high-end hotel in Dubai, and MGM Resorts International is constructing a similar property there. Gaming isn’t yet in the cards for those resorts, but the casino floodgates could open if Dubai changes its tune.
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