Wynn to Enjoy Potentially Lengthy UAE Monopoly, Says CBRE

• Wynn likely to have longer-than-expected head start in UAE
• Regulators unlikely to approve second casino license over near term

Albeit temporary, Wynn Resorts’ (NASDAQ: WYNN) monopoly over casino gaming in the United Arab Emirates (UAE) could last longer than expected.

Wynn Al Marjan Island is on pace to open in early 2027 and it appears the General Commercial Gaming Regulatory Authority (GCGRA) — the UAE’s first gaming regulator — has limited appetite to approve another gaming license over the near term. That could extend the already enviable head start for the Wynn integrated resort, according to CBRE.

It appears momentum for any additional integrated resort licenses in the UAE has slowed, which in turn improves Wynn’s head start in the region to at least a couple of years, if not longer,” said analysts from the research firm in a new report.

Located in Ras Al Khaimah, the $3.9 billion Wynn Al Marjan Island has been under construction since last year and is expected to feature two casinos. Construction is rapidly advancing with Wynn CEO Craig Billings recently noting 42 of 70 hotel floors have been completed, adding that the construction crew is wrapping up one floor per week.

Wynn Can Wring Value from UAE Head Start

In a recent CNBC interview, Billings said the UAE could eventually be a $5 billion to $8 billion gaming market, which compares favorably with the $6 billion in annual gross gaming revenue (GGR) generated on the Las Vegas Strip.

For now, there’s limited clarity as to when UAE regulators will award a second casino license. The most logical recipient would be MGM Resorts International (NYSE: MGM), which has set aside casino space at a nongaming luxury resort in Dubai, but that’s just speculation. What is clear is that Wynn can extract value from its UAE monopoly lasting longer than previously expected.

“Although we still think the awarding of a second license will happen eventually and would likely help investors gain confidence in the market (and thus, valuation credit), the benefit of a longer head start in the region is probably more valuable longer-term,” adds CBRE.

Wynn Likely to Remain a Big Buyer of its Shares

A regulatory filing out last week indicated Tilman Fertitta bought more Wynn shares, increasing his stake in the gaming operator to 11.8% while boosting his status as the largest individual investor in the company.

He’s not the only big buyer of the stock. The company itself is — a trend CBRE expects will remain in place until the share price more adequately reflects the UAE opportunity set.

“We expect repurchases to continue at an elevated pace (US$813 million left on its US$1 billion buyback authorization as 31 December) throughout its current authorization and potentially even further, until the company begins to get credit for its growth prospects in Wynn Al Marjan Island,” concludes the research firm.