Potential Threats to Wynn Casino in UAE from Competitors in Dubai
The Wynn Al Marjan Island integrated resort project of Wynn Resorts (NASDAQ: WYNN) in Ras Al Khaimah, United Arab Emirates (UAE) could potentially face hurdles if Dubai permits casino gaming, according to an analyst.
During the recent G2E Asia conference in Macau, Seaport Research senior analyst Vitaly Umansky mentioned that the Wynn project might encounter issues if Dubai chooses to allow regulated gaming. Dubai, being the most popular tourist destination among the seven emirates, while Ras Al Khaimah is a "small emirate with limited competitive economic advantages," he said.
Umansky made these comments shortly after upgrading Wynn to "buy" from "hold" and setting a price target of $116. This implies a potential increase of nearly 26% from the June 4 closing price.
"We see the market being able to handle two integrated resorts," Umansky said in his report. "The key risk to the property would be a casino opening in Dubai (rather than in Abu Dhabi, which is more likely)."
Umansky further expressed that Wynn could potentially generate around $300 million in annual cash flow from the UAE integrated resort. In April, the Las Vegas-based gaming company announced plans to invest approximately $900 million in the UAE venture, making it a minority partner in the scheme.
Dubai's Decision on Casinos Still Uncertain
Despite Dubai appearing to be a potential market for casino gaming, there's no guarantee that regulators there will approve of such activities. To date, no gaming regulations have been passed in the UAE, although a related governing body was established late last year.
It's expected that the emirates will decide on whether to allow casinos on a per-emirate basis, and Abu Dhabi and Dubai are the most likely candidates, alongside Ras Al Khaimah.
“I think there’s going to be a political agreement between all of these emirates,” Umansky stated. "The smaller emirates are basically nonstarters."
Should Dubai greenlight an integrated resort, MGM Resorts International (NYSE: MGM) could stand to benefit. The company is currently developing a nongaming hotel in Dubai but has left room for a potential casino if regulations permit.
MGM has been constructing three hotels in UAE and has hinted at the possibility of opening a gaming venue in Abu Dhabi if that emirate allows it and Dubai does not.
A Las Vegas-Style Set-up for Wynn's UAE Property
Owing to the conservative stance on gaming within the Arabic world, Wynn's UAE property, set to open in early 2027, is likely to resemble a Las Vegas setup with a significant focus on amenities such as luxurious guestrooms, fine dining, and high-end entertainment instead of the primary focus on casinos, like in Macau - Wynn's largest market.
