Thailand and UAE Integrated Resorts Could Each Add up to $3-5 billion in GRR Annually

October 4, 2024 ThailandUAE Casino & Hotel

Thailand and the United Arab Emirates (UAE) are on the verge of becoming significant contributors to the global gaming industry according to a recent report from Morgan Stanley. Estimates suggest that both nations could generate between $3 billion and $6 billion in gross gaming revenue (GGR) annually, positioning them as key players in the evolving landscape of international gaming.

The report, as cited by AGBrief, highlights the UAE’s gaming market, where Wynn Resorts is leading the way with ambitious plans to establish the country’s first casino by 2027. This venture marks a significant milestone for the UAE, as Wynn Resorts has partnered with RAK Hospitality to develop an integrated resort on Al Marjan Island, a man-made island in Ras Al Khaimah. The project represents a shift in the UAE’s tourism strategy, which has traditionally focused on luxury hotels and attractions but is now embracing gaming as a potential growth sector.

Wynn’s Al Marjan development is expected to tap into the rapidly growing population of high-net-worth individuals in the region, coupled with an influx of international tourists. This demographic presents a fertile ground for the gaming industry. The UAE’s favorable tax environment further enhances the attractiveness of this market for potential investors. With the market projected to reach between $3 billion and $5 billion in annual GGR, Wynn’s early entry provides it with a strategic advantage. The lack of direct competition from established gaming hubs like Singapore and Macau positions Wynn to capture significant market share and drive robust revenue growth.

While the UAE is setting its sights on integrated resorts, Thailand is emerging as another market with substantial gaming potential. Morgan Stanley’s report estimates that Thailand could generate between $4 billion and $6 billion in annual GGR. The country is already a well-established tourism destination in Southeast Asia, with a solid infrastructure that could support gaming expansion. However, the future of Thailand’s gaming industry heavily relies on regulatory developments. The government’s stance on licensing and taxation will play a critical role in shaping the market.

If Thailand implements a favorable regulatory framework, it could quickly rise to become one of Asia’s largest gaming markets. Analysts say Thai’s legal casino sector could even rival more established markets such as Singapore and the Philippines. Industry leaders are optimistic about this potential, as the country has seen growing interest from both domestic and international investors eager to enter its gaming sector.

In contrast, Macau continues to solidify its position as a leading gaming market in Asia. Despite challenges faced by the broader Chinese economy, Macau’s gaming revenue has shown remarkable resilience. As of September 2024, gaming revenue in Macau has rebounded to approximately 77 percent of pre-pandemic levels, with the mass gaming sector even surpassing those levels. This stability is attributed to significant entry barriers and a lack of market overcapacity, allowing Macau to maintain high margins.

Morgan Stanley’s report emphasizes the importance of return on invested capital (ROIC) in assessing the health and potential of gaming markets. Historically, global gaming has sustained ROIC levels above 15 percent, even amid economic downturns. In Singapore, ROIC has returned to pre-COVID levels of 20 percent, driven by a strong recovery in VIP gaming. Emerging markets like the UAE and Thailand are expected to follow suit, benefiting from lower tax rates and carefully managed capital expenditures.

While Macau’s ROIC has dipped post-COVID, hovering around 12.7 percent in 2023, projections indicate improvement to 14.8 percent by 2024. This expected uptick reflects the market’s stabilization and its enduring appeal to operators despite challenges in the VIP segment.