Casino resorts in the United Arab Emirates (UAE) might achieve annual gross gaming revenue (GGR) ranging from $3 billion to $5 billion, potentially competing with Singapore in this regard, based on recent projections by Morgan Stanley.
The bank did not specify how many gaming establishments would be required to reach $5 billion. UAE regulators have not given official approval for casino gaming; however, earlier this year, Wynn Resorts (NASDAQ: WYNN) commenced construction on its Wynn Al Marjan Island integrated resort in Ras Al Khaimah (RAK). It is anticipated to be the inaugural licensed casino hotel in the Arab world. Recently, MGM Resorts International (NYSE: MGM) announced that it aims to obtain a gaming license in Abu Dhabi.
"We benchmark RAK and its closest large international airport/city Dubai to Singapore,” noted Morgan Stanley analysts. “Bottom-line, RAK/Dubai appear to offer similar demand drivers to Singapore, which could point to outsized return on invested capital.”
The analysts noted that Dubai/RAK offers several benefits compared to Singapore, such as a larger population, increased tourism, and a broader selection of five-star hotels.
How the UAE Might Transform into a $5 Billion Casino Industry
The GGR forecast of $3 billion to $5 billion estimated by Morgan Stanley is achievable. Other research companies have earlier projected that Wynn Al Marjan Island, set to launch in early 2027, might achieve $1.4 billion in annual GGR once it reaches full operation.
This suggests that the Wynn property alone might account for nearly half of $3 billion, but achieving that and surpassing it involves additional elements. This includes input from MGM’s casino, the overall number of gaming establishments allowed in the UAE, and whether local residents are allowed to place bets.
Morgan Stanley indicated that as the gaming regulatory process progresses, the UAE may ultimately authorize more integrated resorts than the two present in Singapore, although the final count of gaming venues in the Emirates remains uncertain. Last year, MGM's CEO Bill Hornbuckle stated that the number might reach up to four in the long run.
Morgan Stanley noted that most international tourists to UAE casinos are expected to come from Europe and Southern Asia.
Additional Singapore Comparisons for UAE Casinos
Perhaps crucial to the GGR outcome of UAE casinos is whether or not residents are allowed to gamble at the establishments. The Emirates possess extensive oil riches, and although the count of millionaires is less than in Singapore, Morgan Stanley observed that the growth of ultra-high net worth individuals in the UAE has surpassed that of Singapore in recent years.
The bank emphasized that casinos in the UAE are improbable to undermine competing establishments in other areas, referencing the launches of the two integrated resorts in Singapore as an example.
“Historically, we have seen limited impact of new gaming markets cannibalising existing ones. For example, Singapore opened two of its casinos in 2010 — with 2011 GGR of US$6 billion — but Macau still saw a US$9.9 billion increase (+42 percent year-on-year) in its GGR in 2011,” wrote the analysts.
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