Wynn Resorts, following its acquisition of 155 acres of land on Al Marjan Island, has confirmed its ambitious plans for the “most exciting emerging market.”
Updating investors in its latest financial report, the company emphasized its intention to replicate the successes achieved in Macau and North America in land acquisition and expanding its presence.
In light of the evolving regulatory framework in the UAE, Wynn Resorts CEO Craig Billings expressed enthusiasm about the region’s potential for gaming, calling it “the most exciting new market in the last ten years.”
The creation of the General Authority for Regulating Commercial Gambling has been viewed as a significant positive shift in terms of regulation, particularly regarding transparency for operators. Billings highlighted that the sector is gaining real momentum and expressed confidence that the next step will be the full licensing of the firm.
In his overview of the company’s current progress in the region, Billings informed investors: “Construction is rapidly progressing on the project with work now approaching the 15th floor of the hotel. The building now stands just over 90 meters, which is already the tallest building in the Emirate.
“During the second quarter, we contributed $357m of equity to our UAE joint venture. This transaction included the purchase of our 40% pro rata share of all 155 acres of Island Three, the island on which Wynn Al Marjan sits.
“As a result, our joint venture now owns not only the land under Wynn Al Marjan, but also 70-plus acres of land for potential future development on the Island. Of course, we have banked land before in the US and Macau, and we are confident that acquiring this sizable Marjan land bank will prove valuable over the long term.
“As I have noted before, I believe the UAE is the most exciting new market for our industry in decades and our confidence in the demand and EBITDAR potential of Wynn Al Marjan continues to grow.”
He noted that the company has “approximately $365 million available under the board’s authorization. We are truly balancing all our liquidity needs, including investments for growth, development in the UAE and other potential new markets, as well as small-scale supplies and returning capital to shareholders through dividends and share buybacks. Fortunately, we can do all of this. It’s really a matter of quantity, and we will continue to act prudently in this regard.”
Prospects in Emerging Markets
While the UAE may be the focus, there are many other emerging markets that attract significant interest from operators, including Wynn Resorts.
New York, although of interest, lags behind Thailand in terms of regulatory progress. Thailand aims to open a regulated land-based casino by 2029 and continues to work towards enacting the necessary legislation.
Discussing how the company plans to leverage its current land holdings, Billings stated that the question is not whether the group will expand its presence in Vegas, but when it will expand its presence in Vegas.
He noted: “You can look at the history of gaming markets, Macau, in particular, and you can see the power of a land bank and the power of using that land bank and going to market relatively quickly, so that’s top of our mind. The other development opportunities that we have, most notably the potential in New York and Thailand, it’s too early to say what the returns will be because we don’t know what the tax rate will be. And obviously, that heavily inversely correlates to what the return on the project will be. We won’t do vanity projects if those vanity projects don’t deliver appropriate returns relative to everything else that we have on our plate.”
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