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Wynn’s update on RAK casino has analysts abuzz

By Valentina Pasquali
The casino floor of Wynn Las Vegas. The company's resort in the UAE is due to open in 2027 Shutterstock
The casino floor of Wynn Las Vegas. The company's resort in the UAE is due to open in 2027
  • Investor presentation set for October
  • Gaming licence ‘could be imminent’
  • UAE national lottery sparks hope

Wynn Resorts is to update investors next month on its plans for the UAE’s first casino, heightening analysts’ speculation about the company.

The Las Vegas-based hospitality group is building a $4 billion, 1,500-room resort on Al Marjan Island in Ras Al Khaimah. 

The complex is expected to open in early 2027 and Wynn’s CEO Craig Billings told analysts in 2022 that it would include a casino. 

Since then, no further information has been released on whether or when the company will obtain a gaming licence. 

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However, Wynn’s announcement that it will host a presentation during the Global Gaming Expo taking place in Las Vegas in October, focused on its UAE operations, has piqued the interest of US equity analysts.

“The fact that management is willing to host a three-hour investor meeting could likely imply that regs and licence issuance are imminent,” JP Morgan analysts wrote in a research note.

“It could also suggest that management and the board are looking to be incrementally visible [aggressive] on ways to generate shareholder value.”

Wynn and its competitors have struggled in recent years because growth in post-pandemic travel to their resorts in Macau has been slow.

There have been signs of improvement this year, but geopolitical uncertainty has contributed to “ho-hum expectations” for Macau in 2024-25, according to JP Morgan.

The analysts said prominent casino operators such as Wynn, Las Vegas Sands, Melco Resorts & Entertainment and MGM held “absolutely apathetic to negative sentiment” towards the autonomous Chinese region – and, as a result, their stocks had underperformed.

“We are optimistic that investors will begin to ascribe some value for the UAE,” the report said.

In a sign of possible things to come, the UAE’s year-old Commercial Gaming and Regulatory Authority issued the first national lottery licence and a broader gaming framework in July. 

Wynn and other casino operators in Macau have been hit by slow growth in visitor numbers since the pandemicAlamy via Reuters Connect
Wynn and other casino operators in Macau have been hit by slow growth in visitor numbers since the pandemic

John DeCree, senior equity analyst for the real estate consultancy CBRE, said the lottery licence “is a step in the right direction” and Wynn “could give more colour” during its presentation.

A CBRE report published in June suggests that “regulated gaming is coming to the UAE in the near term”, likely through “a federal decree or legislative changes to the criminal and penal code”.

The report, which was co-written by DeCree after a trip to the Emirates, states: “Given the increase in activity in the region and in public company commentary, we anticipate these legislative changes to be forthcoming in the next few months.”

“In fact, the decree may have already been signed but not yet published, and we wouldn’t necessarily expect a very public announcement when it is published.”

Legal gaming in the UAE could eventually generate more than $8.5 billion in revenue, though limited supply might be an initial hurdle, according to the report. 

CBRE based its estimates on the likelihood that Abu Dhabi, Dubai and RAK will each build at least one casino resort. 

The report described the UAE “one of the best IR [integrated resort] investment opportunities we have seen in a long time” thanks to its growing population, large proportion of expats, “robust” tourism sector, consumers’ “high propensity to spend” and “virtually” no regional competition in the gaming industry.

Go to our GCC economic data page for more Gulf indicators

Wynn’s plans in the northern emirate have spurred a rush of development and rising property prices.

CEO Craig Billings said last month that construction of Wynn Al Marjan Island was “progressing at a rapid pace”.

Morgan Stanley analysts said in a report dated the day after Billings’ comments that Wynn was pushing “more chips into the table on its UAE project”. 

In a separate piece of research published earlier this month, the same Morgan Stanley analysts compared valuation prospects for Las Vegas Sands and Wynn.

Both stocks trade at significant discounts relative to historical averages, the analysts said, “likely driven by heightened investor anxiety over exposure to China”. 

However, they believe Wynn offers “a potential catalyst near-term from its investor event on UAE this October”.

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