As construction continues on the $3.9 billion Wynn Al Marjan integrated resort in the United Arab Emirates, Wynn Resorts touted future growth opportunities at that site, as well as in Las Vegas, Bangkok, and New York.
During the second-quarter earnings call Tuesday with Wall Street analysts, Wynn announced it contributed $356.5 million in cash to its 40%-owned joint venture in the Wynn Al Marjan Island development, bringing its to-date cash contribution to the project to $514.4 million. The cash contributed during the quarter was used primarily to fund its pro-rata portion of the purchase of about 155 acres underlying the site, including more than 70 acres for potential future development by Wynn or third parties.
The resort in the Emirate of Ras Al Khaimah is currently expected to open in 2027.
Wynn CEO Craig Billings said that construction is progressing at a rapid pace, with work approaching the 15th floor. The building is currently 90 meters, the tallest building in the Emirate.
“The UAE is the most exciting new market in decades and our confidence in the demand and EBITDA potential in Wynn Al Marjan continues to grow,” Billings said. “We also made meaningful progress in the quarter on debt financing for the project and expect we will finalize that debt financing later in 2024.”
Billings noted that the UAE has launched information detailing commercial-gaming-licensing procedures as part of the regulatory process, including outlining the General Commercial Gaming Regulatory Authority (GCGRA).
“We were delighted with the public announcement of the federal regulatory body for gaming,” Billings said. “The members of that body are some of the luminaries of the industry and very experienced regulators. The establishment of the GCGRA hopefully creates clarity for investors and financing sources. They also awarded a lottery license for the UAE and hopefully that gives folks comfort. I assume they will be moving forward in the next step with our licensure. We don’t have a specific timeline for you, but you can see all the momentum.”
In a response to a question about where the UAE project will draw its clientele from, Billings said there’s no integrated resort on that half of the planet, with the closest in Singapore and Macau. In addition, a robust population is within an eight-hour flight in a part of the world where people are accustomed to flying larger distances for vacations.
There are 86 million air lifts coming into the Dubai Airport and 10 million people who live locally, including nine million who are not natives, Billings said. Compared to Boston or New York City, that’s a favorable number, he added.
“Europe is an important market for the UAE in general, but don’t forget India,” Billings said. “It’s a huge market for this part of the world. There’s a lot of wealth in India, and that’s going to be an important market. There are b big markets in Asia for the UAE.”
Billings said the UAE will offer its biggest return as a gaming operator.
As for Las Vegas, Billings said they will grow in Las Vegas and that it’s a question of “when and not if, and we’ll take advantage of our land bank in Las Vegas.” He added it’s too soon to talk about the potential return in New York without knowing the tax rate. “We won’t do vanity projects if those vanity projects don’t contribute appropriate returns relative to everything else we have on our plate.”
Billings also talked about the potential for gaming in Thailand, a country they’re interested in. He called it “early days,” though he called progress with the legislators who want to get the process moving “encouraging.”
“We need to see more details on the regulatory licensing structures, but the market is attractive and probably conducive to meaningful investment, pending a deeper understanding of the regulatory structure. It has an amazing tourism structure and strong service culture and favorable expense structure in that market,” Billings said. “We’re continuing to monitor the process very closely and we’re active on the ground there.”
