Bright And Shiny Wynn Al Marjan Navigates Treacherous Waters

Arising in soon-to-be glittering splendor on the shores of the Persian Gulf, Wynn Al Marjan represents a historic first: the initial casino-megaresort in the region. Wynn Resorts has pierced the anti-gambling veil of the United Arab Emirates, and its $5.1 billion investment is proof.

Wall Street is exuberant and no wonder. Wynn is projecting $1 billion to $1.7 billion in annual revenue from Al Marjan Island once it opens in 2027. That’s actually no big deal, according to corporate Chief Communications Officer Michael Weaver. He points out that in 2024, Wynn Macau produced $1.4 billion and Wynn Palace (also in Macau) yielded almost $2.3 billion. Marina Bay Sands in Singapore delivered over $3.7 billion.

It’s expected that Wynn Al Marjan will have the field all to itself for at least five years, as other gambling megaliths try to curry favor with the Emirates. Both MGM Resorts International and Caesars Entertainment have been kicking tires in the region with varying degrees of success, but neither has achieved Wynn’s breakthrough.

Breaking ground on a groundbreaker

The saga dates back three years this month, when then-Deutsche Bank analyst Carlo Santarelli broke the news of a 1,000-room, casino-enabled pleasure dome set to open in 2026. That timeline proved optimistic. Little more was heard until April 2023, when Wynn unveiled designs for a $3.9 billion megaresort, featuring 1,500 rooms, 24 restaurants, and a casino. 

Cognizant that gambling requires regulation, in September 2023, the UAE formed a casino-oversight body with former MGM CEO Jim Murren as chairman. Its remit was described as being to “streamline regulatory efforts, oversee national licensing, and promote the responsible and sustainable growth of the commercial gaming sector, unlocking its full economic potential.”

By February of last year, the projected opening had been pushed back to 2027. At the same time, MGM scrapped plans for a casino in the UAE, not having seen the degree of favor experienced by Wynn. Details of the latter project continued to be distilled. It was codified by CBRE at 1,217 rooms and 297 suites, six bars, and 22 eateries.

In a concession to Muslim sensibilities, the amenities would also include dedicated prayer rooms, along with a pair of “Royal Apartments,” four “Garden Townhomes,” and 10 so-called “Marina Estates.” Wynn also snapped up an additional (as-yet-undeveloped) 155 acres for $200 million.

Of the culturally sensitive amenities, Weaver says, “All our resorts are created specifically for the markets in which they are located, and Wynn Al Marjan Island is no different. … Similar to our resorts in Macau, the gaming area is screened from the rest of the resort. The resort’s restaurants, theater, and other amenities are accessible without entering the gaming area.”

The London casino connection

By the time the UAE formally granted Wynn a gambling license, the budget had swelled to $5.1 billion, making Wynn Al Marjan costly — yet a bargain next to the $30 billion that MGM and Orix Corp. are throwing at their casino-resort in Japan. Reported Las Vegas Advisor, “The emirates are already baking in eight percent increases in tourism and international tourist spending. The emirates would permit direct ownership of real estate, casino credit, and a 12 percent tax on gambling revenue,” cheap compared to most U.S. states.

A year ago, seeking an additional conduit for siphoning petrodollars into Al Marjan, Wynn purchased Crown London Casino, Great Britain being a favored destination for Arab lucre. Forbes was impressed: “Wynn is being refreshingly candid about the acquisition, saying it hopes to gather up gamblers from Great Britain, India and, yes, the Persian Gulf to funnel to Wynn Al Marjan, currently fast-rising in the United Arab Emirates.”

Explains Wynn’s Weaver, “Wynn Mayfair [as it is now known] offers us a presence in a global gateway city with an elegant casino, along with an important database of customers. We know that many of our future Wynn Al Marjan Island guests spend a significant amount of time in London, so we will be able to serve them when they’re in that market, as well as create a conduit for new guests to visit us” in the Gulf.

Most recently, Wynn revealed last month that its portions of the art collection — ranging from works by Jeff Koons to a dinosaur skull — would be on view in the UAE. A Marc Quinn sculpture, “Light into Life,” was specially commissioned for the occasion. There was no indication if the art on view had been pre-cleared with Emirati authorities.

Gambling — the new oil?

Why gambling and why now? While many would doubtless hail the opening of Muslim nations to casino gambling, the Wynn timing is of particular interest. In a Dec. 7 investor note, Daniel Politzer of J.P. Morgan got to the crux of the question, pointing out that petroleum exports will be going from 40% of the 2010 Emirati GDP to 20% in 2030.

Clearly, a new income stream is needed, and mass tourism is it. Although it is a given that Emirati-born customers are forbidden from gambling, 90% of the UAE populace of 11 million are expatriates. Such locals are expected to be the top visitor demographic, followed by tourists from Saudi Arabia, Bahrain, Kuwait, Oman, and Qatar, as well as Russia, Eastern Europe, India, and China. Dubai is within six hours by air from Israel, Saudi Arabia, India, Russia, Turkey, and Egypt and it’s another hour (if traffic is light) from Dubai’s airport to Ras Al Khaimah, where Wynn Al Marjan is rising.

Adds Weaver, “Significant road and infrastructure construction is underway in advance of the resort’s spring 2027 opening, including a new bridge to Marjan Island that connects the island to major highways from Dubai and Abu Dhabi.”

Ras Al Khaimah is ramping up accordingly. It’s going from 7,472 hotel rooms now to 16,229 in 2030. Not only is the congested highway from Dubai being enlarged, so is the RAK airport, quintupling annual passenger capacity to 3 million, as well as providing air-taxi service to Dubai, a 15-minute flight away.

Further, reports Deutsche Bank analyst Steven Pizzella, “The Ethiad Rail is expected to launch in 2026. The rail is expected to connect all 11 UAE cities and eventually extend to neighboring [Gulf Coast] countries. By 2030, the rail is expected to serve 36.5 million passengers annually.”

The rich get richer

As Pizzella explains, “We believe [Wynn Al Marjan] will get the Dubai gaming customer, given the current monopoly in the market and high-end product offering, though the non-gaming customer would especially benefit from the property being easier to get to, visiting the F&B, retail, and entertainment offerings.”

As the flow of petroleum wanes, the standard of living of Wynn Al Marjan’s prospective gamblers isn’t declining. According to Jefferies Equity Research analyst David Katz, high-net-worth individuals are moving into the UAE at the rate of 9,800 a year.

“Rising wealth growth among the top-tier income levels is expected to continue through 2030,” Katz chronicles. “The continued inflow is driven by zero income tax, global safety leadership, long-term visa reforms, rapid infrastructure advancement, and wealth management.” In such a context, he added, Wynn’s billionaire revenue projections weren’t the least bit aggressive, especially when compared to jurisdictions with what he called “arguably less supportive market setups.”

Indeed, with free rein until at least 2031 (the soonest a competing casino could come on line, experts say), Wynn’s revenue forecast could be quite conservative. Writes Pizzella to investors, “We believe the higher-end room growth in the market is pivotal, as more rooms should correlate to more visitors to the property and lead to increased GGR and elevated spending on property, given the current monopoly in the market for a casino license.”

And if anyone excels in the luxury market, it’s Wynn. Concludes Pizzella, “For starters, Wynn has a history of meaningfully outperforming peers on a [cash flow] per hotel room basis, as evidenced in Las Vegas.”

More like Singapore than Macau

Early in the Al Marjan going, some over-exuberant observers were claiming the Emirates would constitute a second Macau. To put that in context, the Chinese enclave was delivered $30.9 billion in gambling revenue last year — and it has a far larger population at its doorstep.

Revisionist thinking has it that the UAE will be another Singapore, a jurisdiction of limited casino offerings (two) and high revenue. This argument holds water.

Politzer quantifies the Singapore case as follows: There are 200,000 millionaires in the UAE versus 333,000 on the Johor Strait, but 7,000 relocated millionaires in the emirates as opposed to just 3,500 in Singapore. Throw in 92 million air passengers into and out of Dubai a year, compared to 68 million for Singapore, and you have the makings of a bull case.

Writes the J.P. Morgan stock boffin, “The region shares similarities with Singapore, serving as a magnet for ultra-high-net-worth global citizens. … As the global income and wealth gap continues to widen, the countries with accommodative tax/regulatory policies such as the UAE and Singapore should further attract [ultra-high-net-worth] global citizens and their wealth.”

Throw in Emiratis’ “extremely high willingness to spend on ultraluxury experiences” and Wynn could achieve a return on investment approaching 20% — unheard of in casinos today. Politzer puts the potential ROI at $500 million to $800 million a year, in the form of one million customers coming three times annually, spending $400 a day, and staying a minimum of one night. 

Then there are the 80,000 millionaires within a 90-minute drive and five other Al Marjan resort projects. Small wonder Wynn expects 10,000 visitors a day (compared to 25,000 in Las Vegas), 70% of them from off-property. As has been the case with the Mirage, Bellagio, and Wynn/Encore Las Vegas, the company figures to have Ras Al Khaimah’s must-see attraction.

Politzer puts the potential ROI at $500 million to $800 million a year, in the form of one million customers coming three times annually, spending $400 a day, and staying a minimum of one night. 

What price safety?

Extols Pizzella, “Abu Dhabi and Dubai were ranked the safest two cities in the world in 2024 and healthcare and education continue to improve.” But at what cost does this stability come?

The U.S. State Department’s website takes a fairly dim view of Emirati human rights. It begins by warning, “Significant human rights issues included credible reports of: disappearances; arbitrary arrest or detention; transnational repression against individuals in another country; serious restrictions on freedom of expression and media freedom, including censorship; and prohibiting independent trade unions or significant or systematic restrictions on workers’ freedom of association.”

The good news is that dealers and slot attendants will probably find themselves treated with respect by the players: It is unlawful to engage in “cursing, rude gestures, and insults.”

However, criticism of the government is illegal, as is derogation of private citizens. Homosexuality and transgender individuals are outlawed. Wearing a keffiyeh can lead to detention (or deportation) if it’s interpreted as a political statement. Media are government-owned and controlled and private correspondence is closely monitored.

Reports Joey Shea, who monitors the region for Human Rights Watch, “No freedom of expression, assembly, or association is allowed whatsoever.” She continues, “Human Rights Watch has, over the last decade, documented an intense crackdown on basic rights and freedoms in the UAE, starting around 2011. Authorities rounded up civil-society activists, government critics, and dissidents and sentenced them to decades-long terms. In this process, a lot of these activists and civil-society members experienced grave detention-related abuses.”

Some argue that the Emirates are growing more enlightened. In September 2023, then-J.P. Morgan analyst Joseph Greff wrote, “Contentious issues, such as alcohol and women’s rights, have seen historic changes in regulation, while cities such as Dubai have seen drastic shifts toward westernizing, attracting tourists and residents from around the globe.”

Shea dissents: “The situation has actually been deteriorating in recent years.” She adds that U.S. companies should be “doing an assessment of the potential human-rights impacts of any projects there.”

Workers face two kinds of heat

That would include labor issues. The State Department cautions, “Domestic and construction workers and other manual laborers were the groups most likely to experience excessive work hours, uncompensated overtime, delayed wage payments, and withheld rest days and leave entitlements.” 

The touchiest of touchpoints is the infamous Kafala system, a form of indentured servitude by which desperate immigrants obtain work in the UAE. Explains Human Rights Watch’s Shea, “Workers are needing a huge sum in order to begin work, which creates a situation of indebtedness even before they begin their work.”

Wynn asserts that the Emirates are different in that respect. Says Weaver, “The UAE has a modern and updated visa program for recruiting talent that all companies use and that we will use as well.”

Pizzella concurs, writing that the decade-old Golden Visa program offers “lifetime residency, which allows current residents and foreign expatriates, plus families, to work in the UAE and be able to stay long term without the need for a sponsor.” Unsponsored residency would appear to obviate the Kafala regime.

Shea disagrees. She contends, “Fundamentally, the Kafala system has not been abolished and we regularly document wage theft, illegal recruitment fees, passport confiscation, and abuses related to health-and-safety concerns.” (She spoke generically, not of Wynn specifically.)

Even the most enlightened employer is up against the harsh Arabian climate, where “cool weather” is a highly relative term, especially for exposed work like construction (and Wynn has 18,000 construction laborers on site, a veritable army.) “Obviously, in Dubai and other places in the UAE, the summers are incredibly hot. These extreme temperatures go even beyond the summers,” relates Shea. “There are very few protections under UAE law for these workers from the effects of extreme heat.”

Wynn’s in the catbird seat

As Weaver notes, three-fourths of the world’s population can get on a plane and be in Dubai in eight hours. Small wonder that neither western Europe nor the vast Indian subcontinent are outside of Al Marjan’s catchment area.

Nor is competition coming soon. Caesars Palace Dubai is a thing of the past. MGM evidently thought it was in line for an emirates casino, but so far, it isn’t. (It may not help that regulatory chairman Murren left MGM on less-than-amicable terms.)

Still, rivalry is deemed inevitable by some. Says Inside Asian Gaming Editor Ben Blaschke, “The big question isn’t so much if at least some other emirates follow suit, but when. … There is no doubt MGM Resorts considers itself a leading contender and has stated its intention to pursue a license in both Dubai and Abu Dhabi should the opportunity present. In fact, the company has claimed to have already submitted an application in Abu Dhabi, despite the emirate having not yet opened any formal bidding process.”

Already, Blaschke points out, MGM has boots on the ground in the form of The Island, a resort featuring several MGM hotel brands, plus a casino-ready space. However, he adds, “The smart money says Abu Dhabi is most likely to be next in line to host a casino-resort, which would explain MGM’s interest. Dubai is likely in no rush to follow suit in the short-term.”

It is taken as inevitable that, should Wynn succeed (and there are no doubters about this), others will follow. The Kerzner family’s Atlantis brand has been tipped as a contender and perhaps even Sheldon Adelson’s heirs will be heard strumming a mandolin and crooning a verse from the old ditty, “The Sheik of Araby”: “At night while you’re asleep/Into your tent I’ll creep.”