Though Wynn Resorts scrapped its Strip-located beach resort-esque Paradise Park lagoon in 2018, it seems the company’s mind never left the beach.
In the company’s first project in the MENA region and first beach resort globally, Wynn Resorts will develop a multi-billion-dollar resort “with gaming facilities” on Al Marjan Island in Ras Al Khaimah, United Arab Emirates.
The project is also the first announcement of legalized gambling in any of the seven Emirates. Caesars currently operates the massive Caesars Palace Dubai, a project that does not have gambling – yet. Islam, the predominant religion of the Arabian Peninsula, prohibits gambling.
The company release only stated that the project would include “gaming facilities” with no elaboration. However, Ras Al Khaimah Tourism and Development Authority (RAKTDA) later confirmed the “department of entertainment and gaming regulation” will oversee “hotel operations, convention space, entertainment, restaurants and lounges, spa, retail and gaming facilities” in these resorts.
“The department of entertainment and gaming regulation within RAKTDA will consider the social, cultural, and environmental landscape of the emirate and cover licensing, taxation, operational procedures and consumer safeguards,” it said.
“The gaming regulations, based on the newly implemented guidelines, will be similar to Singapore in structure, with variant tax rates on mass and premium gaming (~5% for premium / ~15% for mass),” said Carlo Santarelli, analyst with Deutsche Bank Research.
Craig Billings, CEO of Wynn Resorts, said: “Al Marjan Island is a pristine setting and an ideal greenfield location for us to create the one-of-a-kind guest experiences for which Wynn Resorts is renowned. The region offers tremendous potential for the hospitality and tourism industry, and we are excited about the prospect of developing an integrated resort in Ras Al Khaimah.”
WYNN stock initially dropped as low as $82.15 on the NASDAQ early morning, down 3.1% from its $84.80 close on Monday. But by 12:40 pm ET, it had risen back to $84.74, just a 0.07% drop.
The resort is said to be the largest project to date in the Emirates hospitality sector and the largest-of-its-kind foreign direct investment in Ras Al Khaimah, one of the seven Emirates.
The resort is in the initial design and development stages and will be applying for an integrated resort license from Ras Al Khaimah Tourism Development Authority.
Santarelli said that he expects the project to cost approximately $2 billion. It will be developed with partners Marjan, the island’s master developer, and RAK Hospitality Holding.
Al Marjan Island, a set of four islands, is already a tourist destination and has 670 acres of land extending into the Arabian Gulf and offers “spectacular views of the Arabian Gulf” as well as sandy beaches and a marina. It was not announced which island the resort would be built on.
The current scope of the resort includes a 1,000+ room hotel, high-end shopping mall, a state-of-the-art meeting and convention facility, a spa, more than ten restaurants and lounges, a wide array of entertainment choices, a gaming area, and other amenities.
Eng. Abdulla Al Abdooli, CEO of Marjan, said: “We are partnering with Wynn Resorts, one of the world’s most renowned integrated resort companies, which has a strong track record of developing luxury destinations with exceptional accommodation, dining, entertainment concepts and gaming facilities.
“By leveraging Wynn Resorts’ expertise in developing luxury hospitality destinations, the new development will raise the benchmark in luxury hospitality in the region. It will also create exceptional value to the Ras Al Khaimah economy and boost the leisure, business, and MICE tourism sectors.”
It was not mentioned how RAK Hospitality Holding is involved in the project. but Santarelli opined: “We believe the structure of the deal between Wynn and RAK Hospitality is akin to a management contract lodging structure in which Wynn will receive a fee that approximates 5% of net revenue and an incentive fee based on EBITDA, while also owning a piece of the real estate venture (25-40%), from which it could receive dividends.”
