The website of the United Arab Emirates (UAE) gambling regulator – the General Commercial Gaming Regulatory Authority (GCGRA) – has gone live to the public, and the body has also announced the country’s first-ever lottery licence.
Both steps act as a “key marker” the federal Middle Eastern state is committed to gaming commerce, suggested brokerage CBRE Capital Advisors Inc in a Sunday report.
“While some may have still doubted in the market’s progress” regarding a move to regulation, the advent of the website “is a key marker of the UAE’s commitment to regulating commercial gaming and should help refute the most bearish sentiment about regulated gaming not reaching the market at all,” wrote the CBRE team of John DeCree, Colin Mansfield, Connor Parks and Max Marsh.
Global gaming operator Wynn Resorts Ltd – parent of Macau casino operator Wynn Macau Ltd – is currently developing a casino resort project, Wynn Al Marjan Island, in Ras Al Khaimah, one of the UAE’s emirates. The project has been described as US$3.9-billion venture involving local partners, in which Wynn Resorts is a 40-percent equity investor.
CBRE said recently the venture could generate US$1.4 billion annually in gross gaming revenue (GGR).
Wynn Resorts’ management had previously said it would not have put investment in the ground there, without certainty of gaming becoming a regulated activity.
CBRE nonetheless observed: “Despite Wynn’s construction progress at Wynn Al Marjan Island, investors have been reluctant to incorporate its potential in equity valuation, which we attribute mostly to scepticism related to regulation. This weekend’s regulatory progress could also bring Wynn’s debt financing solution for Al Marjan Island closer to fruition,” the CBRE analysts observed.
In September last year, it was announced Jim Murren – a former chairman and chief executive of MGM Resorts – was to be the inaugural chairman of the UAE regulator, a fact confirmed by the now-live website. It also says that Mark Lipparelli – a former chair of the Nevada Gaming Control Board in the United States – is on the UAE regulator’s board.
CBRE noted the website includes a definition of commercial gaming; lists gaming-licence types; and outlines licensing procedures for commercial gaming.
Commercial gaming is defined by GCGRA as “games of chance and/or skill”, and where “an amount of money is placed as a bet for the purpose of winning an amount of money”. Commercial gaming encompasses “any game conducted at a land-based gaming facility”, which includes “slot machines, table games including blackjack, roulette, baccarat, craps, poker, etc”; as well as lottery, Internet gaming and sports wagering.
Renewable-licence regime
The CBRE analysts noted: “The GCGRA licensing procedures also specifically reference ‘land-based gaming facilities’, which supports the notion of integrated resorts (IRs) in the UAE.”
Certain key information – such as applicable tax rates – are not currently available on the GCGRA public website.
But under its licensing guidelines, the various types of gaming licence are renewable upon expiry unless there is “substantial evidence of gross non-compliance of the licensee”.
The CBRE team stated: “Although we could not discern an explicit duration period for gaming licences, the language in the guidelines suggest licences could be perpetual, provided licensees continue to demonstrate that they meet a range of requirements, related to key topics including ownership, financial strength, integrity, competence and criminality.”
CBRE also noted: “This renewable licence would be more consistent with the regulatory environment in Nevada rather than the concession model in both Macau and Singapore. We view the renewable licence model as more operator-friendly, which can attract higher levels of investment and long-term commitment with more predictability.”
The UAE regulator announced on Sunday the award of a licence to operate the federation’s first authorised lottery. The permit went to The Game LLC, which is to operate under the banner of “UAE Lottery”.
