UAE Casinos Could Reach $5B in GGR, Rivaling Singapore, Says Morgan Stanley

Casino resorts in the United Arab Emirates (UAE) have the potential to generate between $3 billion to $5 billion in annual gross gaming revenue (GGR), potentially rivaling Singapore, according to a recent estimate from Morgan Stanley.

A report from the bank, which did not specify how many gaming venues would be necessary to reach the $5 billion figure, comes as the UAE edges closer to becoming a casino destination. Although casino gaming is not yet officially approved by UAE regulators, Wynn Resorts (NASDAQ: WYNN) broke ground earlier this year on its Wynn Al Marjan Island integrated resort in Ras Al Khaimah (RAK). This is expected to be the first regulated casino hotel in the Arab world. Additionally, MGM Resorts International (NYSE: MGM) has announced its intention to pursue a gaming license in Abu Dhabi.

Morgan Stanley analysts noted, “We benchmark RAK and its closest large international airport/city Dubai to Singapore. Bottom-line, RAK/Dubai appear to offer similar demand drivers to Singapore, which could point to outsized return on invested capital.”

The report also highlighted that Dubai and Ras Al Khaimah boast some advantages over Singapore, including a larger population, higher levels of tourism, and a wider array of luxury five-star hotels.

Path to a $5 Billion Casino Market

The projected $3 billion to $5 billion GGR forecast is achievable, according to Morgan Stanley. Other research firms have estimated that Wynn Al Marjan Island, which is slated to open in early 2027, could generate $1.4 billion in yearly GGR when fully operational. This suggests that the Wynn property alone could account for nearly half of the lower-end estimate of $3 billion.

However, reaching the $5 billion mark will require more factors to come into play, such as MGM’s contribution, the total number of gaming venues allowed in the UAE, and whether or not locals will be permitted to gamble. Morgan Stanley suggested that as the regulatory process progresses, the UAE may approve more integrated resorts than Singapore’s two. Last year, MGM CEO Bill Hornbuckle hinted that the UAE could see as many as four casino properties in the long term.

Morgan Stanley further predicted that the majority of international visitors to UAE casinos will likely come from Europe and Southern Asia.

Comparisons to Singapore’s Casino Market

A key factor in determining the success of UAE casinos could be whether locals are permitted to gamble. The UAE is home to significant oil wealth, and while its millionaire population is smaller than Singapore’s, the growth of ultra-high-net-worth individuals in the UAE has outpaced Singapore in recent years, according to Morgan Stanley.

The bank also highlighted that UAE casinos are unlikely to negatively impact competing gaming markets in other regions. Citing the example of Singapore, Morgan Stanley analysts noted, “Historically, we have seen limited impact of new gaming markets cannibalizing existing ones. For example, Singapore opened two of its casinos in 2010 — with 2011 GGR of US$6 billion — but Macau still saw a US$9.9 billion increase (+42 percent year-on-year) in its GGR in 2011.”

As the UAE moves closer to the realization of its first casino resorts, analysts and industry insiders will continue to monitor whether the nation’s potential to rival Singapore’s gaming market becomes a reality. 

By fLEXI tEAM