The CBRE Capital Advisors has identified the United Arab Emirates (UAE) as the “next gaming frontier,” with projections suggesting it could generate $8.5 billion (€7.9 billion) in revenue. This figure positions the UAE to rival major gaming hubs like Las Vegas and Singapore.
“We believe the UAE represents one of the most compelling opportunities in global gaming, given its robust tourism industry, high propensity for luxury and consumer spending, business-friendly operating environment, strong transportation and lodging infrastructure, and virtually no gaming competition in the region,” stated John DeCree, head of institutional investor research, and Colin Mansfield, head of credit research.
A favourable environment for operators
The CBRE report highlights the UAE’s progressive stance on attracting investment and tourism, which is expected to create an “operator-friendly environment.” Unlike other regions such as New York and Japan, where regulatory processes have faced numerous delays, the UAE promises an efficient regulatory landscape. This, combined with a favourable long-term economic outlook and minimal competition, makes the UAE a prime location for integrated resorts.
“It could be the Las Vegas of the Middle East,” DeCree remarked during a webinar, noting that only a fraction of Las Vegas Strip revenue comes from gaming. “Las Vegas is more akin to a non-gaming destination, even with a significant gaming component, but from the perspective of a true IR experience, the UAE is well on its way to doing that.”
Strategic investments and infrastructure development
The UAE’s strategic investments in its airports aim to boost tourism capacity significantly. “Incrementally more exciting is the lack of regional competition,” DeCree added. Colin Mansfield emphasised the country’s focus on enhancing tourism infrastructure for future generations.
Upcoming projects and potential locations
CBREw‘s insights stem from their visit to the UAE in May, which included a stop at Wynn’s integrated beachfront resort on Ras Al Khaimah’s Marjan Island, set to open in 2027. DeCree indicated that Abu Dhabi, with Yas Island, and Dubai, with The Island project at Jumeirah Beach, are likely candidates for future integrated resorts.
Regulatory changes on the horizon
DeCree believes that regulated gaming is imminent in the UAE, paralleling previous relaxations of activities such as alcohol consumption by non-Muslims. Legislative changes to the criminal and penal code are expected soon. The expected regulatory framework would be “operator-friendly,” allowing one integrated resort per emirate. The initial focus would likely be on national lottery regulations and operator licensure, followed by a comprehensive framework for integrated resorts.
Revenue projections and market potential
CBRE estimates that three integrated resorts in Abu Dhabi, Dubai, and Ras Al Khaimah could collectively generate around $6 billion (€5.57 billion) in gaming revenue. With a population of 9.7 million, primarily expatriates, and a strong tourism industry attracting about 25 million annual visitors, the UAE presents a significant investment opportunity.
CBRE models predict strong returns and high property margins for Wynn Al Marjan Island, driven by strong demand and a favourable regulatory construct. The report suggests that Wynn’s management contract and 40 percent share of project economics could yield significant annual free cash flow by 2030.
SiGMA East Europe, Budapest, September 2024
Looking ahead, the gaming industry will shift its focus to Eastern Europe this September with the SiGMA East Europe Summit 2024 in Budapest. This event is expected to attract industry professionals from across the region, providing a platform for networking, business development, and exploring the latest trends in the gaming sector.
