The development of Wynn Resorts’ US$4 billion integrated resort on Al Marjan Island in the UAE represents a pivotal move into an emerging gaming market, as detailed in a comprehensive report by CBRE Institutional Research titled “United Arab Emirates: The next gaming frontier.”
Financial Projections and Market Outlook
CBRE’s analysis forecasts impressive financial metrics for the Wynn Resorts project. Annual gross gaming revenues (GGR) are estimated to reach US$1.38 billion, with net revenues anticipated at US$1.8 billion annually. These projections are underpinned by the current undersupply of gaming facilities in Ras Al Khaimah, suggesting a rapid ramp-up phase and potential stabilization within three years. Drawing parallels to successful market entries in other regions, analysts highlight the project’s strategic advantage as a first-mover in the UAE’s burgeoning gaming landscape.
Profitability and Operational Efficiency
Central to CBRE’s findings is the projected Property EBITDARM of US$921 million per annum, reflecting robust operational performance. Leveraging Wynn Resorts’ 40% equity stake and management contract, the report forecasts a substantial free cash flow of approximately US$356 million by 2030. The analysis also emphasizes the potential for high operating margins, citing an expected regulatory environment comparable to Singapore and favorable labor conditions conducive to efficient operations.
Market Potential and Competitive Landscape
The UAE market for gross gaming revenues is estimated at US$8.5 billion, underscoring significant growth opportunities. CBRE’s base case scenario posits annual revenues of US$6 billion with the development of three integrated resorts across Abu Dhabi, Dubai, and Ras Al Khaimah. Factors contributing to this outlook include a diverse population of 9.7 million, predominantly expatriates, coupled with a robust tourism sector attracting approximately 25 million visitors annually. The absence of direct gaming competition in the region further enhances the investment appeal, positioning the UAE as a compelling market for integrated resort ventures.
CBRE’s report paints a compelling picture of the UAE as a prime investment destination for integrated resorts, exemplified by Wynn Resorts’ ambitious project on Al Marjan Island. With unparalleled market potential, supportive regulatory frameworks akin to global gaming hubs, and favorable economic conditions, the UAE presents one of the most promising opportunities in the integrated resort sector today. Investors and stakeholders alike are poised to benefit from the strategic positioning of Wynn Resorts in tapping into this dynamic and rapidly evolving market landscape.