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Jim Murren was on the minds of two casino company CEOs this month.

But he was never mentioned by name.

Wynn Resorts and MGM Resorts International have designs to enter a potentially lucrative gaming market in the United Arab Emirates, a Middle Eastern country of about 9 million people. Wynn is a little further along with its $3.9 billion project on the man-made Al Marjan Island in Ras Al Khaimah, which was first announced in early 2022.

MGM is developing a non-gaming resort in Dubai, the UAE’s largest city, with three hotel towers totaling 1,500 rooms branded under the Aria, MGM Grand and Bellagio names.

The UAE changed the game plan in September when it announced the creation of the General Commercial Gaming Regulatory Authority (GCGRA), which was established to introduce a regulatory framework for a national lottery and commercial gaming.

The agency supersedes licensing control over the individual emirates. Murren, the former chairman and CEO of MGM Resorts, was named GCGRA chairman.

Wynn CEO Craig Billings, who told investors in August the company would “imminently” have its gaming license for a project expected to open in 2026, was a bit more circumspect in remarks on the company’s Nov. 9 quarterly earning conference call.

He said the pilings being driven into the island that will support the 1,500-room hotel foundation had been completed.  

“You’ve seen that they've appointed leadership for the regulatory body there,” Billings said of Murren and Kevin Mullally, the former Missouri gaming regulator and head of government affairs for Gaming Laboratories International, who was named CEO of the GCGRA.

“I think that's really good for the market because it lends a lot of certainty for financing sources, which allows us to move forward with the construction financing relatively quickly,” Billings said. “It eliminates a lot of questions that we used to get.”

As for MGM Resorts, CEO Bill Hornbuckle said on Nov. 8 that the company would “see a significant opportunity if gaming were to be legalized, first in UAE and ultimately in Dubai.” MGM is partnering with a subsidiary of Dubai-based Wasl Asset Management Group on its project, but unlike Ras Al Khaimah, gaming is not on the radar — yet.

“I think you all understand our former CEO is now chair of the gaming commission there, which is very real,” Hornbuckle said of Murren’s new role. “They’ve taken a swing at [gaming].”

Hornbuckle said MGM currently has a “hospitality management-only” agreement with its partner if a casino becomes part of the development. He said Dubai is similar to Las Vegas with 20 million-plus annual visitors and 140,000 hotel rooms.

“We will look to invest equity, or we will lease the casino,” Hornbuckle said. “It depends on what a partner and potentially our existing partner wants to do. We like Dubai for all the obvious reasons.”

The UAE is made up of seven emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Fujairah and Ras Al Khaimah, which is the only emirate with a committed casino development.

Billings said gaming regulations for the UAE “are in draft form” and the gaming license process would have two steps: the issuance of a provisional license and then a final license.

“I expected that would happen soon. The process is moving along,” Billings said.

A spokesman for the GCGRA declined to comment.

Analysts aren’t ready to furnish more than cursory remarks concerning the UAE until the GCGRA provides the final gaming regulations and announces additional regulators to join Murren and Mullally.

“Wynn sees progress on what they expect to result in a license being awarded in the UAE with regulations allegedly in draft form,” J.P. Morgan gaming analyst Joe Greff wrote in an early November research note, mirroring the remarks from Billings.

For now, it’s all about Macau

As for MGM and Wynn, the focus in the third quarter was more on results from Macau. 

The removal of all government-imposed, pandemic-related travel restrictions after three years helped the companies’ Macau casinos produce net revenue that was a combined nine times higher than the same quarter in 2022.

MGM’s two Macau resorts produced a net revenue of $813 million, compared with just $87 million in the same three months of 2022. Wynn’s two Macau properties combined for $819.8 million in revenue, compared with $115.6 million last year.

In October, Macau casinos reported more than $2.42 billion in revenue, the region’s single-highest month in more than three years.

Macau was long considered the world’s largest gaming market. Casinos in the Chinese Special Administrative Region produced a single-year high of $45 billion in gaming revenue in 2013. However, declines in the Chinese economy and the pandemic zapped the market for almost 10 years. 

To the investment community, Macau is a known entity. 

“While the exact recovery timeline around Macau remains unknown, we continue to believe in the long-term resiliency of the market and believe it’s a matter of when, not if, the market returns to normal/accelerated levels,” Stifel Financial gaming analyst Steven Wieczynski wrote in a Nov. 1 research note.

The UAE, however, has untapped potential.

Initially, analysts said Singapore’s two casinos, which produced an estimated $6 billion in annual revenue according to Bloomberg Intelligence, could provide a comparison model.

The UAE, which is part of the Middle East where gambling has long been prohibited under Islam, is changing its view given the growing competition for tourism from Saudi Arabia and Qatar. 

Billings said he expects Wynn will have the UAE to itself when the property opens in 2026. He expects one or two other companies will enter the UAE — potentially MGM in Dubai. But he said being the first and the only casino in the Emirates has historic advantages, especially for building a customer database.

“Our view is that it will likely be us and us alone for a multiyear period given that we are well underway on construction now,” Billings said. “This is the most exciting new market opening in decades.”

News, notes and quotes

Henderson casino operator sells two Water Street properties

The company co-owned by Henderson businessman Tim Brooks sold downtown Water Street casinos Emerald Island and the Rainbow Club for an undisclosed price. Brooks will continue to oversee operations for the new owners, ECL Hospitality.

“This sale was a hard decision to make as we have invested so much time and energy into both properties over the years,” Brooks said. “The opportunity to be involved with the new ownership group going forward is important to me.”

ECL is controlled by Ron Winchel, who owns five traditional taverns with slot machines under three brands and more than 15 Jackpot Joannie’s slot parlors in Southern Nevada, and Marc Falcone, a longtime gaming research analyst, who spent four years as Red Rock Resorts’ chief financial officer.

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Acres Gaming prevails in patent infringement case brought by IGT

The U.S. Patent and Trademark Office determined that Acres Gaming did not infringe on four patents owned by International Game Technology for its casino management system that pertain to cashless wagering. 

IGT filed the complaint in 2021 and demanded Acres pay royalties, which would have dramatically increased the price casinos pay for the management system.

"Presuming the findings stand … all claims of infringement will be dismissed,” said Acres Gaming CEO John Acres. “In my opinion, these patents should never have been asserted against us."  

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Analyst: Sphere is a ‘bit of an unknown’

Macquarie Securities analyst Paul Golding offered a simple suggestion for Sphere Las Vegas, which reported a net loss of almost $100 million in the quarter ending in September. The $2.3 billion Sphere opened Sept. 29 and held two sold-out U2 performances on the final days of the quarter.

“Sphere continues to be a bit of an unknown given the novel format and [the] cost to build and operate,” Golding wrote in a research note last week. “Additional revenue streams are likely (and needed)."