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United Arab Emirates (UAE) Gaming Regulations Could Arrive by 2023, Paving the Way for Wynn Resorts

In a noteworthy development, the United Arab Emirates (UAE) has announced the formation of the General Commercial Gaming Regulatory Authority (GCGRA), marking a significant step towards potential gaming regulations in the country. Analysts at JPMorgan believe that this move could set the stage for the introduction of gaming regulations in the UAE before the close of 2023.

United Arab Emirates (UAE) Gaming Regulations Could Arrive by 2023, Paving the Way for Wynn Resorts

The creation of the GCGRA is particularly significant due to its potential implications for the gaming industry in the UAE, which has been relatively unexplored until now. The establishment of a dedicated gaming regulator signals the country's willingness to consider this industry seriously.

One of the notable aspects of the GCGRA is its leadership team, which boasts substantial industry expertise and connections to U.S.-based gaming operators and regulatory agencies. Leading the GCGRA is former MGM Resorts International CEO, Jim Murren, serving as Chairman. Additionally, Kevin Mullally, a seasoned gaming attorney and lobbyist with three decades of experience in the industry, holds the position of Chief Executive Officer of the GCGRA.

Analysts at JPMorgan are optimistic about the GCGRA's leadership, stating, "We are encouraged by the GCGRA's leadership team's general industry expertise and ties to U.S.-based gaming operators and regulatory agencies."

The timing of the UAE's decision to unveil the GCGRA holds particular importance for Wynn Resorts. The company is actively working on the construction of Wynn Al Marjan Island, a $3.9 billion integrated resort set to open on Al-Marjan Island in early 2027. Notably, this resort is expected to become the first casino hotel in both the UAE and the broader Arab world. It is poised to feature a larger gaming area than Wynn Las Vegas, making it a significant project for Wynn Resorts.

On a recent second-quarter earnings conference call, Wynn CEO Craig Billings expressed optimism about the emergence of gaming regulations in the Emirates. This regulatory clarity is eagerly anticipated, as it could significantly impact the financing of the Wynn Al Marjan Island project and provide a boost to Wynn Resorts' share price.

The timing surrounding the licensing of Wynn Al Marjan Island is still somewhat fluid. However, it is considered the catalyst that could prompt the UAE to initiate its first set of gaming protocols. The UAE has strong motivations to facilitate this process, as the project is expected to generate various economic and tourism benefits, including increased demand for other projects in the market, higher employment, tax revenues from elevated income levels, and heightened land values.

JPMorgan analysts recognize the progress being made in terms of gaming law enactment, securing property-level financing, partner equity contributions, and construction acceleration. Consequently, they anticipate that investors will begin assessing and attributing net equity value to the project, a significant shift from earlier skepticism regarding gaming in the region.

While Wynn Resorts is at the forefront of this potential gaming revolution in the UAE, other major players in the industry are also keeping a close watch on developments. MGM Resorts is currently involved in the development of a nongaming hotel in Dubai. However, the appointment of Jim Murren as GCGRA chairman has sparked speculation that MGM may reconsider its plans if casino gaming is approved.

In the face of these developments, Caesars Entertainment recently announced its withdrawal from a nongaming hotel project in the UAE. This decision came after the establishment of the GCGRA, suggesting that regulatory clarity could reshape strategies for various operators.

In conclusion, the creation of the General Commercial Gaming Regulatory Authority in the UAE represents a significant shift in the country's stance towards gaming. While the precise timeline for gaming regulations remains fluid, the move has generated optimism in the industry, especially for Wynn Resorts, which is eyeing the UAE as a potential gaming frontier.

By fLEXI tEAM




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