Wynn Nearing Start of UAE Hotel Construction

Gamblers Daily Digest -

Wynn Resorts Ltd. has reported notable progress in constructing its multibillion-dollar Integrated Resort development in the United Arab Emirates, according to a recent update from the company’s Chief Executive Officer Craig Billings.

The Wynn resort project on Al Marjan Island in Ras Al Khaimah emirate will cost nearly $4 billion and feature a large hotel complex with 1,500 guest rooms, suites, and villas, as well as meeting and convention facilities, a theater, a spa, shopping center, and other amenities when completed. The gaming area is expected to house roughly 300 table games and over 1,300 slot machines across multiple casino floors.

The optimistic update comes several months following Dubai’s decision to temporarily suspend its plans of licensing casino operators. While the project initially targeted a 2026 opening, Wynn expects the resort to welcome its first guests in early 2027.

The UAE is expected to be the first Arab country to legalize gambling. The legalization of gambling is expected to boost tourism in the UAE and create thousands of jobs.

Major Construction Progress amid Solid Q4 2023 Earnings

In comments to analysts, during an earnings call for Q4 2023, Billings noted that construction of Wynn Al Marjan Island continues to advance at a commendable pace. Specifically, the company indicates that foundation works on the hotel tower and podium structures for the Wynn Al Marjan Island casino property are almost complete, paving the way for the developer to begin vertical build-out on the tower itself soon.

Once vertical construction begins, the transformation of the site will become readily apparent as the tower rises above the island landscape. Billings remarked that seeing the buildings literally take shape has been encouraging.

The comments provide the latest evidence that Wynn Resorts Ltd. is making major inroads, bringing to life its vision for an integrated resort in the UAE. Significant infrastructure work has already been laid with the tower foundations, paving the way for the project to continue moving upward and outward.

At the same time, Wynn’s financial results for Q4 2023 indicate considerable expansion in key economic metrics. Operating revenues for the quarter reached $1.84 billion, representing over 80% growth compared to the prior year’s Q4 revenues of $1 billion.

The company also saw substantial improvement in profitability, with net income climbing to $729.2 million. CEO Billings attributed these positive developments largely to heightened business volumes and operating performance year-over-year at its integrated resort holdings in Las Vegas and Macau jurisdictions. 

Project Scope and Partners

When complete, Wynn Al Marjan Island will cover a massive 5.6 million square feet, with gaming facilities accounting for only 4% of that total area if approved, according to plans. In addition to the hotel, the resort is slated to feature meeting spaces, a theater, a spa, retail outlets, and other attractions.

In addition to traditional amenities, the resort will feature light and laser shows each night to provide something unique to guests. Created to accommodate prolonged vacations along with single-day visitors, the fully integrated resort complex is scheduled to welcome its first guests in early 2027, barring any delays.

This aligns with Wynn Resorts’ long-standing strategy to position gaming as a secondary offering, allowing luxury hotel stays, premium entertainment, and high-end dining to take center stage. Such an approach may appeal to regulators in the United Arab Emirates, who have historically opposed casino gaming but are now exploring potential opportunities. 

With Wynn’s integrated resorts on the Las Vegas Strip also utilizing gaming as a complimentary amenity rather than a primary draw, the company sees substantial room for growth in the Middle East by extending its brand into new markets in this fashion. 

Wynn has invested $1.6 billion for a 40% equity stake here in the project, with the remaining capital coming from local partners Marjan LLC and RAK Hospitality Holding LLC. Major construction contracts have been awarded to firms like Alec Engineering and Bauer International to ensure the development is built to the highest standards.

Potential for Regional First, but the Buck is with the Gaming Regulator

If regulators approve, Wynn Al Marjan Island could become the first integrated casino resort in the Middle East region when it opens in a few years. Currently, gambling is prohibited in the UAE.

However, the nation has taken steps towards regulated gaming. Last September, the United Arab Emirates formed its inaugural gaming oversight body, the General Commercial Gaming Regulatory Authority (GCGRA), led by former MGM Resorts CEO Jim Murren. 

The GCGRA holds a mandate to put together gaming frameworks and legislation for the UAE, likely determining the number of integrated resorts authorized. However, the entity has yet to publish applicable gaming guidelines and regulations.

This lack of clarity around Wynn Resorts securing casino licensing in the UAE poses possible hurdles. Despite a nearly 16% year-to-date rise in Wynn’s share price, some analysis suggests the UAE project’s value is not fully captured, indicating investors may be apprehensive about casino approval chances or failing to fully appreciate Wynn’s growth opportunities in the region.

Wrapping Up: Continued Progress Ahead

As construction advances towards vertical stages on the hotel tower, Wynn Al Marjan Island will gradually continue to emerge from the island landscape. The development represents a strategic diversification of Wynn’s portfolio into new international markets with strong potential, such as the UAE.

If gaming is eventually approved, the resort could establish Wynn as a first mover in the nascent Middle Eastern casino industry. But even without immediate gaming, the project will deliver a new luxury integrated resort option to the region upon opening in early or mid 2027.

Investors and those following the development will be keenly watching construction milestones over the coming years as Wynn Al Marjan Island rises from the ground. Updates from CEO Billings indicate that the project remains well on track based on the recent progress.

Author: Bryan Cook