Posted: September 29, 2024, 06:38.
Last updated: September 29, 2024 06:38h.
According to recent estimates from Morgan Stanley, casino resorts in the United Arab Emirates (UAE) could reach between $3 billion and $5 billion in annual gross gaming revenue (GGR), on a basis that would likely surpass Singapore. Possibly comparable.
Winds UAE Casino Hotel Rendering. Morgan Stanley estimates that the market could ultimately record up to $5 billion in GGR annually. (Image: 11 Prop/YouTube)
The bank did not say how many gambling halls it would need to reach the $5 billion mark. Although UAE regulators have not officially approved casino gaming, Wynn Resorts (NASDAQ:WYNN) announced earlier this year that it would be developing its Wynn Al Marjan Island integrated resort in Ras Al Khaimah (RAK). Construction has begun. This is expected to be the first regulated casino hotel in the Arab world. Most recently, MGM Resorts International (NYSE: MGM) announced that it would pursue a gaming license in Abu Dhabi.
We benchmark RAK with Dubai, the closest large international airport/city to Singapore,” Morgan Stanley analysts said. “Ultimately, RAK/Dubai appears to offer similar demand drivers as Singapore, which could indicate a very high return on invested capital.”
Analysts added that Dubai/RAK has several advantages over Singapore, including a larger population, higher tourism levels and a greater number of five-star hotels.
How the UAE became a $5 billion casino market
Morgan Stanley’s $3 billion to $5 billion GGR forecast is possible. Other research firms have previously estimated that Win Al Marjan Island, scheduled to open in early 2027, could generate annual GGR of $1.4 billion once fully operational.
That means Wynn’s real estate alone could cover nearly half of the $3 billion, but there will be other factors at play beyond getting there. These include donations from MGM’s casinos, the total amount of gambling venues allowed in the UAE, and whether local residents are allowed to bet.
Morgan Stanley says the UAE could eventually approve more integrated resorts than the two in Singapore as the gaming regulatory process progresses, but ultimately Emirate-owned gaming venues He pointed out that the total number is still unknown. MGM CEO Bill Hornbuckle said last year that over the long term, that number could be as high as 4.
Morgan Stanley added that the majority of foreign tourists visiting UAE casinos are likely to come from Europe and South Asia.
See more UAE casino comparisons in Singapore
Perhaps crucial to the fate of GGR in the UAE casino is whether local residents are allowed to bet on the premises. Although these emirates have vast oil reserves and fewer billionaires than Singapore, the growth rate of the UAE’s ultra-rich population has outpaced Singapore’s in recent years, Morgan Stanley said.
The bank highlighted the example of two integrated resorts debuting in Singapore, adding that UAE casinos are unlikely to cannibalize competing properties in other regions.
“Historically, the impact of new gaming markets cannibalizing existing gaming markets has been limited. For example, Singapore opened two casinos in 2010 and had a GGR of US$6 billion in 2011. “However, Macau’s GGR in 2011 still increased by USD 9.9 billion (42% year-on-year increase),” the analysts wrote.