Wynn Resorts’ UAE venture detailed

Garance Limouzy October 9, 2024

Wynn Resorts has recently announced that it is the first to obtain a gaming operator’s licence in the United Arab Emirates (UAE). Its luxury integrated resort, Wynn Al Marjan Island in Ras Al Khaimah, is set to open in Q1 2027. The company has also released an detailing projected costs, expected revenues, the tax structure, and specifics of the awarded licence.

Licence and shared venture details

The partnership for Wynn Al Marjan Island involves a joint venture between Wynn Resorts, RAK Hospitality Holding LLC, and Al Marjan Island LLC. Wynn holds a 40 percent equity stake in this venture, with RAK Hospitality holding the remaining 60 percent. The project has been granted a 15-year renewable licence.

***Rendering of the future resort. Source: Wynn Resorts.***

Tax structure and project cost

Wynn Al Marjan Island will benefit from a favourable tax structure that supports its profitability and long-term growth, declared the company. It will operate with a blended tax rate of 10 percent to 12 percent, a tax arrangement comparable to the tax blend for VIP and mass gaming in Singapore, providing a conducive environment for gaming operations. The total investment for the Wynn Al Marjan Island project has been revised from an initial estimate of $4 billion to $5.1 billion, reflecting adjustments for inflation and market conditions. This budget encompasses land acquisition, capitalised interest, and various fees associated with the development. Construction is expected to ramp up significantly in the coming months, with a goal to achieve 89 percent of the hard construction costs of approximately $2.7 billion by the end of the fourth quarter of 2024. The resort is expected to open its doors in Q1 2027.

Projected revenue

Wynn Al Marjan Island is anticipated to generate robust revenue, with projections estimating the UAE market size for integrated resorts at approximately $3 to $5 billion. The projected revenue breakdown for the integrated resort indicates that gaming will play a significant role, but non-gaming revenue streams are also expected to thrive. Wynn expects to capture a 33 percent share of this market, boosted by what they term a “Wynn Premium,” which positions them favourably against competitors in the region.

Overall, Wynn anticipates a substantial contribution to its Adjusted Property EBITDA from this venture, projecting that by 2026, the UAE will account for 20 percent of its total adjusted property EBITDAR, alongside Macau (42 percent), Las Vegas (30 percent), and Boston (8 percent).

A promising market

Several factors contribute to the high revenue projections for Wynn Al Marjan Island. First and foremost is the UAE’s status as an untouched casino region, presenting a unique opportunity for Wynn to establish its brand in a market that has previously been underserved in terms of integrated resorts. The UAE’s favourable business climate, with a rapidly growing economy and rising tourist arrivals, further bolsters these projections.

***UAE’s promising market. Source: Wynn Resorts.***

The region’s GDP has seen substantial growth, increasing from $400 billion in 2013 to $514 billion in 2023, with projections reaching $609 billion by 2027. Moreover, tourist arrivals have risen dramatically, from 15 million in 2013 to 25 million in 2023, with expectations of reaching 34 million by 2027. This influx of visitors is expected to drive demand for luxury accommodations, fine dining, and entertainment options that Wynn Al Marjan Island will provide.

***Projected sources of GGR for the new integrated resort. Source: Wynn Resorts.***

The region’s high propensity to spend on luxury goods, with the GCC high-end fashion market reaching $4 billion in 2023, further supports the expected success of Wynn’s offerings.