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Wynn is planning on opening a new resort in Ras Al Khaimah in 2027. While the resort does not yet hold a gambling license, as none have been issued in the UAE despite guidelines being in place, there is every expectation that Wynn's resort will be the first proper casino resort in the United Arab Emirates. However, with new rumours indicating that Dubai might allow casinos to operate within the city, industry analysts are predicting this means bad things for Wynn.
Dubai and casinos
We want to stress that there is no physical Dubai casino at present, nor are there formal plans to build one. However, MGM is planning to set aside some space in their current resort build in the hope that things change.
While there is an overarching gambling legislation group for the UAE, it is up to each emirate to decide whether they wish to allow casino resorts in their area. While Dubai has not yetintroduced anything that wouldallow casino resorts to operate within Dubai, the expectation is that they will. After all, Dubai has long fought to become a top global tourist destination, and casino resorts are known to be a major attractionfor tourists.
However, if Dubai does allow casino resorts to develop there, as expected, it could spell disaster for the likes of Wynn.
Why would Wynn be impacted?
Wynn has no plans to open in Dubai. They are fully committed to opening their doors in Ras Al Khaimah, which, to be fair, is a fantastic place to establisha luxury resort. According to Wynn, only a small sectionof the resort will become a casino if Ras Al Khaimah grants them a gambling licence. So, only a small portion of their business is likely to be related to gambling. However, this hasn't stopped the team behind Wynn, along withtheir investors, getting a little worried.
If Dubai opts to allow casino resorts there, then this could pose major problems for Wynn. Wynn would find it insanely tough to attract people from Dubai to come and stay at their new resort. After all, the majority of tourists that head to the UAE do so because of Dubai, and if Dubai has major casino resorts, that's where they will go.
MGM, who are planning on opening a major resort in Dubai, have much grander plans for their casino venture than Wynn does. MGM is not currently planning to open a casino at their resort, since there is no current gambling legislation in Dubai. However, if they are granted a licence, they will have 150,000 square feet of space available for their casino. This would be considerably larger than Wynn's space, which means it is going to be even harder for Wynn to attract people to their resort.
You must remember that the number of people who are potentially gambling at these resorts is limited. The locals are less likely to gamble due to religious restrictions, which means that it will, mostly, be tourists and expats who have relocated who would be gambling. Most of this activitywouldbe centred on Dubai.
That's not to say that Wynn won't make some money – theycertainly will. However, we feel that their foray into gambling in the UAE will be severely limited, and even industry analysts are predicting the same. They believe that if gambling is approved in Dubai, Wynn will see their share price fall.
That being said, Wynnhas probably built this into their business plan. They must know that building a resort around gambling in a country that doesn’thave gambling legislation carries a risk. They would also know that if Dubai introduces gambling, their plan could be thrown into disarray. So, they likely aren't massively worried. It'll just take a bit longer for their investment to pay off.
Dubai will feel the benefits
Of course, where there is a loser, there must be a winner. Dubai will be the winner if, as expected, gambling is approved there.
If gambling is approved in Dubai, then it will be just another way for the city to attract some of the wealthier tourists. Wealthy tourists, particularly those who engage in gambling, are known to spend the big bucks. This means that not only will the economy see a boost thanks to the income from gambling, but there will also be a boost from the other businesses that will benefit fromwealthier tourists.
It is worth noting that it is unlikely that we'll see a major number of casino resorts in Dubai. At the moment, every indication is that if gambling is allowed in Dubai, only one resort will be granted a licence. This is likely to be MGM, since they are building amajor resort. So, MGM will almost certainly benefit.
Of course, only time will tell how this ends up playing out for everybody.
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