Casino resorts in the United Arab Emirates (UAE) could potentially achieve annual gross gaming revenue (GGR) between $3 billion and $5 billion, potentially rivaling Singapore, according to recent estimates by Morgan Stanley.
The bank has not specified the number of gaming venues needed to reach the $5 billion mark. UAE regulators have yet to officially approve casino gaming, but Wynn Resorts (NASDAQ: WYNN) broke ground earlier this year on its Wynn Al Marjan Island integrated resort in Ras Al Khaimah (RAK). This project is expected to be the first regulated casino hotel in the Arab world. More recently, MGM Resorts International (NYSE: MGM) announced its intention to pursue a gaming license in Abu Dhabi.
Morgan Stanley analysts have compared RAK and its nearest major international airport/city, Dubai, to Singapore. “Bottom-line, RAK/Dubai appear to offer similar demand drivers to Singapore, which could point to outsized return on invested capital,” they noted. They added that Dubai and RAK have advantages over Singapore, such as a larger population, higher levels of tourism, and a more extensive selection of five-star hotels.
The forecasted $3 billion to $5 billion GGR is plausible. Other research firms have previously estimated that Wynn Al Marjan Island, set to open in early 2027, could generate $1.4 billion in yearly GGR at full capacity. This suggests the Wynn property alone could account for nearly half of the $3 billion target. However, achieving and surpassing this figure would depend on contributions from MGM’s casino, the total number of gaming venues permitted in the UAE, and whether locals are allowed to gamble.
Morgan Stanley highlighted that as the gaming regulatory process progresses, the UAE might approve more integrated resorts than the two found in Singapore. Nonetheless, the total number of gaming venues the emirates will eventually have remains unknown. Last year, MGM CEO Bill Hornbuckle suggested the number could be as high as four in the long term.
The bank also mentioned that most international visitors to UAE casinos would likely come from Europe and Southern Asia. Critical to the GGR potential of UAE casinos is if locals are allowed to gamble. The UAE, rich in oil wealth, has seen a rapid increase in ultra-high net worth individuals, outpacing such growth in Singapore in recent years, according to Morgan Stanley.
The bank also emphasized that UAE casinos are unlikely to cannibalize rival properties in other regions. They cited the example of Singapore’s two integrated resorts, which opened in 2010. Despite this, Macau saw a $9.9 billion increase (+42 percent year-on-year) in its GGR in 2011, following Singapore’s debut with a 2011 GGR of $6 billion.
