According to JPMorgan, UAE gaming regulations may surface this year.
The recent formation of the General Commercial Gaming Regulatory Authority (GCGRA) in the United Arab Emirates (UAE) signifies a potential landmark in the introduction of casino gaming regulations in the country. This is according to JPMorgan analysts who ranked the development as "significant."
The leadership team of the GCGRA comprises some distinguished individuals including Jim Murren, former CEO of MGM Resorts International, and gaming attorney and lobbyist Kevin Mullally. The latter, with a 30-year experience in the gaming industry, is the CEO of the GCGRA.
This event is especially relevant for Wynn Resorts, which plans to open its Wynn Al Marjan Island casino resort on Al-Marjan Island in mid-2027. The project happened to be the first of its kind in the UAE and the Arab world, and its expected gaming area is larger than that of Wynn Las Vegas.
The property's timely commencement of construction underpins the importance of the GCGRA's announcement, as its operations seem to fuel the Emirates' initial batch of gaming guidelines. The JPMorgan analysts expressed confidence in the regulators' intentions, remarking that the GCGRA's expertise and ties to U.S. gaming operators and agencies are encouraging.
The absence of gaming regulations in the Emirates poses a unique challenge for Wynn, as it struggles to secure financing and reap the full benefits of its prestigious project. The authors highlighted the potential of such reforms, stating: "The UAE is motivated to facilitate the process given the underlying tourism and economic benefits from this project, which brings incremental demand to other projects in the market, higher employment (and taxes on higher income levels), and higher land values."
Notably, the establishment of the GCGRA transforms a long-held skepticism about gaming in the region. JPMorgan analyst Joseph Greff shared his understanding that the regulatory landscape is evolving, stating: "We, and we think most other sell-side analysts, have adopted a wait-and-see approach — given this earlier skepticism on gaming in the region — and Street price targets have embedded zero equity value related to Wynn RAK."
Another significant player in the gaming industry, MGM, also showed some signs of renewed interest in this development. While currently engaged in constructing a non-gaming hotel in Dubai, its chairman's appointment to the GCGRA has stirred speculation about the operator's future plans. Mullally, a previous MGM executive, appeared to have close ties to the company, indicating that MGM could revise its casino plans in the UAE.
Caesars Entertainment, a rival to Wynn and MGM, downplayed its commitment to the gaming market in the Emirates. Taking a different stance from MGM, it took its name off a non-gaming hotel in the UAE after the formation of the GCGRA. Nonetheless, these changes may portend meaningful shifts in the industry as global attention shifts toward the UAE's burgeoning gaming landscape.
Despite the ongoing uncertainties, the analysts expressed optimism about possible resolutions, remarking that "investors will start [...] assessing and ascribing the net equity value here."
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Source: www.casino.org
