JPMorgan Analysts Forecast Prosperity for Wynn’s UAE Casino

The new casino resort that Wynn Resorts is building in the United Arab Emirates (UAE) will do well, JPMorgan analysts say. They believe this because of the good mix of people and tax rules in the area. 

Wynn Al Marjan Island Set to Be the UAE’s First Legal Casino Resort in 2027

The resort on Al-Marjan Island in Ras Al Khaimah will be the first legal casino hotel in the Arab world. This strategic location, combined with the UAE‘s wealthy clientele and accommodating regulatory framework, is anticipated to make the venture a lucrative long-term investment.

The JPMorgan analysts, with Joseph Greff at the helm, pointed out several factors that boost Wynn Al Marjan Island‘s chances, as reported by Casino.org. Its closeness to Dubai International Airport, a mere 50-minute drive, puts it within an eight-hour flight for almost 96% of people worldwide. The casino hotel aims to attract about 25% of the global population, who make up 20% of the world’s GDP and a big chunk of its ultra-rich. This group of wealthy individuals, along with Dubai’s fame as a spot for luxury and high-end tourism, hints that Wynn’s UAE project will draw in loads of well-off customers.

The resort is set to open in early 2027 and will play a big role in the new UAE casino scene. Experts have drawn parallels between this up-and-coming market and Singapore’s, which has turned out to be a cash cow for operators. Being the UAE’s first legal casino, Wynn Al Marjan Island is likely to have a monopoly for a few years giving it a big leg up on future competitors.

Wynn Projects Robust Earnings from UAE Casino

Wynn predicts high profits from the project estimating yearly earnings between $1.38 billion and $1.88 billion, with an expected adjusted EBITDA from $390 million to $570 million. Also, the resort is likely to produce free cash flow of $170 million to $350 million, with a return on invested capital projected at 9.8% to 15.7%. These numbers match what the industry expects and show the benefits of the UAE’s tax system where the government will tax gross gaming revenue at 10% to 12%. This is very different from Macau where the tax rate is 40%.

What makes the project even more attractive is that Wynn has gotten a casino license for its UAE spot that lasts 15 years beating the usual 10-year permits in other places like Macau. Since there will not be many competitors at first, Wynn’s casino in Ras Al Khaimah will rule the UAE market for a while because the country is not expected to give out many gaming licenses.

Experts think the UAE’s gaming market could grow to $3-5 billion in total. Wynn’s early move into this market puts it in a good spot to benefit from this growth.