{"id":199479,"date":"2022-01-27T09:16:35","date_gmt":"2022-01-27T17:16:35","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=199479"},"modified":"2022-01-28T12:59:57","modified_gmt":"2022-01-28T20:59:57","slug":"wynn-uae-project-could-cost-2-billion-generate-20-roi","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/","title":{"rendered":"Wynn Could Generate 20 Percent ROI on $2B UAE Project"},"content":{"rendered":"

On Tuesday, Wynn Resorts (NASDAQ:WYNN) surprised many in the gaming industry when it revealed plans for an integrated resort on Al-Marjan Island in the United Arab Emirates, a region not synonymous with casino gaming. But it could be a lucrative endeavor for the Las Vegas-based operator.<\/p>\n

\"Wynn
Al-Marjan Island in the UAE, seen from above. Wynn’s planned integrated resort there could generate ROI of 20 percent. (Image: FOX Business<\/em>)<\/figcaption><\/figure>\n

In announcing the project, Wynn didn’t reveal a price tag.<\/a> But analysts are estimating a cost of at least $2 billion while noting the Encore operator could generate return on investment (ROI) of at least 20 percent. Wynn is partnering with RAK Hospitality Holding LLC — a local hotel developer — on the project, and it’s estimated the US company’s stake is going to be around a third.<\/p>\n

We look at the stabilized cash-on-cash ROI to Wynn as in the low-20s-of-percent range,\u201d<\/strong> said JPMorgan analysts in a recent note. \u201cOverall, the economics have the potential to be very attractive.\u201d<\/strong><\/p><\/blockquote>\n

The analysts estimate that when the UAE integrated resort is up and running — 2026 is the expected opening date — Wynn will earn a fee equivalent to five percent of net revenue and an incentive-based management fee based on a percentage of the venue’s earnings before interest, taxes, depreciation and amortization (EBITDA). Wynn will also own a portion of the real estate, potentially enabling it to receive dividends in the future.<\/p>\n

JPMorgan’s 20 percent ROI forecast is arrived at by \u201cthe sum of $70\u00a0million\u00a0of management fees plus $77.5\u00a0million\u00a0stake of EBITDA\u00a0post fees, divided by a\u00a0one-third\u00a0stake in a $2\u00a0billion\u00a0development, or $667\u00a0million.\u201d<\/strong><\/p>\n

Wynn in UAE: More Vegas, Less Macau<\/h2>\n

Wynn’s current portfolio consists of its eponymous venue and Encore on the Las Vegas Strip, Encore Boston Harbor, and two integrated resorts in Macau.<\/p>\n

While Macau accounts for an outsized portion<\/a> of the operator’s EBITDA and revenue, analysts expect the company’s UAE venture will be more inspired by a Las Vegas template and less by the gaming-centric way of doing things in Macau.<\/p>\n

\u201cWynn\u2019s foray into a new geography that has virtually no gaming history and limited competition (at least for now) allows the company to expand its presence doing what it does best — developing and running luxury integrated resorts built around a casino and entertainment lifestyle,\u201d <\/strong>said Bernstein analysts.<\/p>\n

Wynn and Encore are often among the highest-rated Las Vegas resorts, and frequently score excellent marks in broader hotel surveys<\/a> because of the company’s reputation for emphasizing amenities and luxury.<\/p>\n

Bernstein said that in 2019, 75 percent of Wynn’s Las Vegas revenue was derived from non-gaming activities, and that could serve as a model for the UAE project.<\/p>\n

Cautious Tone<\/h2>\n

Owing to the vast oil wealth in the UAE, the region’s established reputation as a tourist destination, and no competing gaming options — at least for now — the Al-Marjan Island integrated resort could add incremental value to Wynn’s share price over time.<\/p>\n

\n

However, CBRE Equity Research analyst John DeCree notes it’s possible the gaming side of the project could take years to come to life or may not be realized at all. But he’s optimistic about the impact if gaming is approved for the venue.<\/p>\n<\/div>\n

\u201cShould the proposed resort get approval to authorize typical gaming activities (slots, tables), the ROI could be significant, given the limited gaming options and amount of wealth and tourism in the region,\u201d he said in a note to clients.<\/p>\n","protected":false},"excerpt":{"rendered":"

On Tuesday, Wynn Resorts (NASDAQ:WYNN) surprised many in the gaming industry when it revealed plans for an integrated resort on Al-Marjan Island in the United Arab Emirates, a region not synonymous with casino gaming. But it could be a lucrative endeavor for the Las Vegas-based operator. In announcing the project, Wynn didn’t reveal a price […]<\/p>\n","protected":false},"author":46,"featured_media":199480,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nWynn UAE Project Could Cost $2 Billion, Generate 20% ROI<\/title>\n<meta name=\"description\" content=\"Wynn's plans for an integrated resort in UAE could cost $2 billion and lead to 20 percent ROI.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Wynn UAE Project Could Cost $2 Billion, Generate 20% ROI\" \/>\n<meta property=\"og:description\" content=\"Wynn's plans for an integrated resort in UAE could cost $2 billion and lead to 20 percent ROI.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-27T17:16:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-28T20:59:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/01\/AlMarjan.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/\",\"url\":\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/\",\"name\":\"Wynn UAE Project Could Cost $2 Billion, Generate 20% ROI\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/01\/AlMarjan.jpg\",\"datePublished\":\"2022-01-27T17:16:35+00:00\",\"dateModified\":\"2022-01-28T20:59:57+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Wynn's plans for an integrated resort in UAE could cost $2 billion and lead to 20 percent ROI.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/wynn-uae-project-could-cost-2-billion-generate-20-roi\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/01\/AlMarjan.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/01\/AlMarjan.jpg\",\"width\":1280,\"height\":720,\"caption\":\"Al-Marjan Island in the UAE. 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Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. 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