Wynn Resorts sets budget for UAE casino resort at $5.1bn

During a presentation to investors earlier this week, Wynn Resorts revealed more details about the upcoming integrated casino resort in the United Arab Emirates. Notably, the price tag of the Ras Al Khaimah development has increased to $5.1bn.

The presentation comes at almost the same time that the United Arab Emirates, and the General Commercial Gaming Regulatory Authority, confirmed that Wynn Resorts may operate a commercial casino on the territory of the integrated resort. The company’s own equity contribution will be $1.1bn.

Outlining the financials of the upcoming Ras Al Khaimah project

At present, the company has already invested $200m, but another $900m is expected to be contributed at a later date. Around $4.55bn of the budget will go to covering direct development costs, along with land, fees, and capitalized interest, Wynn Resorts explained. Wynn is expected to fund the project through a $2.4bn debt.

To realize the project, Wynn is working with RAK Hospitality Holding LLC and Al Marjan Island LLC through a joint venture in which the company will own a 40% stake.

Although coming at a steep cost, Wynn is similarly optimistic about the future and the potential windfall with the integrated resort, as the company expects gross gaming revenue on an annual basis to reach anything up to $1.7bn.

This figure is still a moving target, but a base projection puts the sum at $1.33bn. The EBITDA is set at anything between $390m and $570m, but Wynn Resorts is also aware that it may not be handed a clean slate in the region and should calibrate its expectations to anticipate competition.

Wynn Resorts won’t be the only game in town for long

Two more projects may eventually arrive regionally, with MGM Resorts International already looking to build a hotel and applying for a casino license in Abu Dhabi, transforming the region completely. Wynn Resorts is also hoping to focus on well-heeled players, who are willing to spend.

International VIPs will be flown in, and the company already has a substantial database of such players numbering more than 100,000 people, through its operations in Las Vegas and elsewhere worldwide. Capitalizing on this database could give Wynn Resorts a strong position in the emerging gambling market in the Middle East.

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