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Wynn Al Marjan Island in the United Arab Emirates

The project’s estimated cost, which is expected to be the first gaming venue in the region, is $4 billion, with a targeted opening date of early 2027. Wynn’s minority interest in the venture reduces its financial exposure, meaning it’s not on the hook for the entire $4 billion. The property on Al-Marjan Island is being developed with local partners Marjan LLC and RAK Hospitality Holding LLC.

Its project in the UAE continues its construction, with much of the hotel tower and podium foundation now complete, and will soon start going vertical on the hotel tower,” according to a recent report by JPMorgan analysts.

The property is expected to encompass 5.6 million square feet. But if permitted, a casino will only account for 4% of that space.

Wynn Bullish on UAE
Wynn delivered impressive fourth-quarter results earlier this week, and on a conference call with analysts, CEO Craig Billings waxed bullish on the UAE property.

“And importantly, we have a substantial growth opportunity in the UAE that will further diversify our portfolio and expand our brand into new markets,” he told analysts.

As is the case with the operator’s Las Vegas Strip venues, Wynn Al Marjan Island is expected to feature gaming as more of a minor amenity and less of a focal point — one that takes a backseat to posh hotel rooms, world-class entertainment, and high-end restaurants. That could be to the liking of UAE regulators that are looking for avenues to potentially bring casino gaming to a region that’s long opposed it.

The property “is really going to be a stunner, and it’s great to see the buildings start to take shape,” added Billings.

Gaming Regs Pivotal to Wynn UAE Fortunes
It’s widely expected that Wynn Al Marjan will feature a casino, but that’s not a sure bet. Last September, the UAE announced formation of the General Commercial Gaming Regulatory Authority (GCGRA) — the Emirates’ first gaming regulator.

Led by former MGM Resorts International (NYSE: MGM) CEO Jim Murren, the GCGRA is tasked with developing gaming rules and regulations for the UAE and potentially setting the number of integrated resorts allowed there. However, the group has not yet released related guidelines.

That lack of clarity on the ability of Wynn to operate a casino in UAE is a potential headwind. While shares of the gaming operator are higher by almost 16% year-to-date, some analysts have argued that the UAE project isn’t priced into the stock. That is indicating market participants don’t fully appreciate Wynn’s UAE opportunity set, or are concerned about its casino approval prospects
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Tuesday, February 27, 2024
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