Wynn Resorts has underlined ambitious plans for ‘the most exciting emerging market’ after purchasing 155 acres of land on Al Marjan Island.
Updating investors in its latest financial call, the firm revealed that it can replicate efforts that saw it have success in both Macau and North America in terms of acquiring land and growing its footprint.
As regulatory developments in the UAE continue to unfold and progress, Wynn Resorts CEO Craig Billings underlined his excitement for the potential of the region when it comes to gaming, describing it as the most exciting new market in decades.
In terms of regulation, the establishment of the General Commercial Gaming Regulatory Authority has been cited as a significantly positive step when it comes to clarity for operators.
Billings added that there is real momentum when it comes to development of the sector, emphasising his belief that the next step will be full licensing for the firm.
Providing an overall outlook for the firm’s progress in the region, Billings told investors: “Construction is rapidly progressing on the project with work now approaching the 15th floor of the hotel. The building now stands just over 90 metres, which is already the tallest building in the Emirate.
“During the second quarter, we contributed $357m of equity to our UAE joint venture. This transaction included the purchase of our 40% pro rata share of all 155 acres of Island Three, the island on which Wynn Al Marjan sits.
“As a result, our joint venture now owns not only the land under Wynn Al Marjan, but also 70-plus acres of land for potential future development on the Island. Of course, we have banked land before in the US and Macau, and we are confident that acquiring this sizable Marjan land bank will prove valuable over the long term.
“As I have noted before, I believe the UAE is the most exciting new market for our industry in decades and our confidence in the demand and EBITDAR potential of Wynn Al Marjan continues to grow.”
He also revealed that the firm holds ‘some $365m of capacity under the board authorisation’. Adding: “We’re really balancing all of our liquidities needs between capital deployment for growth, the UAE, potentially other greenfield markets, delivering slightly and returning capital to shareholders through dividends and share repurchases. Fortunately, we’re in a position to do all of that. It’s really a question of quantum and we’ll continue to be opportunistic about it.”
A sea of emerging markets
Whilst the UAE may be stealing the show, there are a myriad of the other emerging markets that are attracting significant allure from operators globally and specifically Wynn Resorts.
Although New York is one market of interest, its progress in terms of regulatory evolution has less vigour than that of Thailand, which has set out ambitions to open a regulated land based casino by 2029 and continued to pursue legislation.
Speaking on how the firm is looking to take advantage of its current land banks, Billings revealed that it is not a question of if but when the group grows its footprint in Vegas.
He added: “You can look at the history of gaming markets, Macau, in particular, and you can see the power of a land bank and the power of using that land bank and going to market relatively quickly, so that’s top of our mind. The other development opportunities that we have, most notably the potential in New York and Thailand, it’s too early to say what the returns will be because we don’t know what the tax rate will be. And obviously, that heavily inversely correlates to what the return on the project will be.
“We won’t do vanity projects if those vanity projects don’t deliver appropriate returns relative to everything else that we have on our plate.”
