UAE & GAMING

UAE and the wider Middle-Eastern gaming landscape

By Ryan Murray

The establishment of a solid gaming market in the Middle-East would pre-empt a colossal commercial opportunity. The comparative riches of this region versus others are well-documented, but it’s internal gambling appetite is a dynamic that is often overlooked. In a landscape traditionally dominated by conservative rhetoric on a number of life’s ‘vices,’ could we be seeing a different narrative evolve?

This article probes into the current and prospective presence of gaming operators in the area, as local discussions around hosting integrated resorts here increasingly percolated. Given recent developments, particular focus will be attributed towards the UAE, where Wynn Resorts have announced their intention to construct a new IR in its Ras Al Khaimah emirate.

Although one of the more liberal governance systems in the Middle East, a case study into the UAE’s approach may shed some light on the potential expansion of gaming into neighbouring territories. Indeed, their recent relaxation of societal rules around alcohol consumption and sex before marriage, with gambling likely to be added to this list, could serve to catalyse a wider regional response.

Competition between gulf states to attract tourists has been as fierce as ever in recent times, and is now accentuated by a global pandemic that shows only tentative signs of abating. Will a combination of these factors propel Middle-Eastern lawmakers to take an unprecedented step towards gaming?

In the UAE, a number of its emirates seem increasingly receptive towards embracing the gaming sector. Wynn’s IR venture is the crystallization of years of gradual movement towards gaming pursuits in the federation. Landing in the busy emirate of Ras Al Khaimah, the new resort will be constructed on Al Marjan, a vast, man-made island cultivated on 2.7 square miles of reclaimed land. The ambitious development is not lacking infinancial support, with the Las Vegas-based firm ploughing a $2billion investment into the project. The Gulf state has been open about its desire to drive further footfall through its borders, regardless of whether this comes as a result of business or tourism enterprises. The carrot of long-term visas for re-locating entrepreneurs, coupled with the aforementioned reforms in its attitude towards sex and alcohol, serves to promote the likelihood of increased traffic. Thiscentral government sentiment is shared by a number of leadership officials in itscomponent emirates.

In 2017, Ras Al Khaimah’s local authorities stated their intention to preside over a substantial uplift in tourism visitations, targeting 3 million holidaymakers per annum by 2025. In the last full year prior to the pandemic, the emirate bore witness to 1.1 million tourists hitting its shores. And, although this optimistic objective has been somewhat undermined by the spread of COVID-19, it hasn’t exactly blown it out of the water. At the pandemic’s peak, the global tourist market slumped to a 75% decline versus its like-for-like performance. In RAK, the comparative figure was

represented by only a 25% drop-off.

However, within the context of gaming, it’s how the emirate wants to covert this considerable commercial opportunity that piques interest. Although no party, on either the corporate or domestic side of Wynn’s new adventure, has confirmed whether real stakes gambling will feature, there are certainly some suggestive activities towards this type of activity. The operator has already confirmed that a defined ‘gaming area’ will be incorporated into the resort. Moreover, the emirate has already moved to appoint an internal legislative body to control gaming endeavours, through its tourism’s board creation of the Department of Entertainment and Gaming Regulation. Surely this is a signpost of RAK’s desire to introduce formal gambling practice?

Dubai have long since flirted with the concept of gaming, a development perhaps to be expected in the context of its more cosmopolitan environment. Indeed, Dubai International Airport, recorded as the fourth busiest airport on the planet in 2019, facilitates the arrival of approximately 86 million guests each year. The temptation to cash in on this, through any and all means possible, seems to be increasingly challenging to repel.

In April last year, regional leaders had to quash rumours in relation to gambling licenses being imminently allocated to gaming operators. Furthermore, the building of several ‘resorts’ throughout the emirate feels a lot like a territory positioning itself for its next strategic move. Industry giants MGM and Caesar now have vested interests in Dubai, with endeavours on ‘The Island’ and Bluewaters Island respectively. Caesar’s first foray into a nongaming enterprise was launched in 2018, whilst MGM eagerly await final completion on three luxurious new hotels located on ‘The Island,’ part of a 300-strong entourage of artificial islands built off Dubai’s coastline.

But do the United Arab Emirates’ 10 million residents even have an appetite to become punters? And is there enough external interest to further supplement a gambling sector?

In a nutshell, yes. In fact, this positive response is relatively resounding in nature. A colossal 90% of its population are of ex-patriate persuasion, and domestic tourism accounts for a third of the state’s total travel industry. Given that these communities will most likely have tolerable attitudes towards gaming, a considerable opportunity exists. Furthermore, of its 22 million incoming visitors, the vast majority are natives reigning from lands of significant domestic wealth, with residents from India, Germany, the United Kingdom, and Russia, accounting for the bulk of arrivals.

However, although the potential for gaming to be a success in the UAE feels tangible, it’s much more difficult to judge the rest of the Gulf contingent. Of the six nations that comprise the Gulf Cooperation Council (the UAE plus Bahrain, Kuwait, Oman, Qatar and Saudi Arabia), the United Arab Emirates have traditionally, and particularly in the contemporary context, been the most liberal in its policy assertions. It

could therefore be reasonably argued that the proliferation of gaming in the region may end at the Sheikhdom’s borders.

However, as we’ve seen in political and cultural history, momentum towards particular movements often flows freely through Arab states. Indeed, revolution, revolt, and reform can have a domino-style impact on the region, and its therefore worth acknowledging that the UAE’s apparent step-change in approach could stimulate further gaming enterprise around the Persian Gulf.

Reviewing gambling exploits in other Muslim-majority countries also offers reason to be optimistic. Although not often documented in mainstream coverage, there have been numerous occasions whereby governments of Arab nations have permitted wagering in their respective lands. In Egypt, fourteen casinos generate over $200m in gross gaming revenue each year, a number made more impressive by the fact that gambling is restricted to the leisure spaces of premium hotels. Lebanon’s sole casino facility in Maameltein, just north of capital Beirut, registers $175m in GGR. Even more astonishingly, a small proportion of shares in the Lebanese Casino du Liban, are held by the Kuwaiti government. Indeed, there is seemingly no restriction, moral or otherwise, on Middle-Eastern governmental bodies investing in overseas gaming markets. Dubai World, a subsidiary organization tethered to Dubai’s local legislature, transferred $5.2b to bail-out MGM Mirage back in 2007. An offshoot of the Emirati group, known as Istithmar World, helped fund operator Kerzner International, who historically held a property in the Caribbean. Their only current resort in operation, is ironically in Morocco, another Muslim entity who has embraced the money-spinning labours of the gaming industry.

However, these examples aren’t exactly revelations. Historically, various regimes have permitted gaming institutions to set-up shop within state borders. Before the Islamic Revolution of 1978, Iran’s Shah Reza Pahlavi allowed casinos to function, with most falling under the stewardship of British-based firms. Local adversary Iraq also facilitated a gambling venue; however, this was subsequently closed, and indeed never re-opened, following the outbreak of the first Gulf

11th APRIL 2022 Savoy Hotel London

War. Even Palestine provided a platform for casino enterprise. Sanctioned by former leader Yasser Arafat, local businessmen established a haven for Israeli punters, held back by restrictions in their homeland. However, doors closed after rioting and a sustained cross-border travel ban.

Although these venues were often out-of-bounds to locals, they still illustrate the potential scope of markets, both inside and directly outside the Middle-Eastern theatre.

Yet, perhaps more tellingly, swarms of Arab punters regularly travel to other sovereign nations to get their gambling fix. Importantly, this demonstrates that there is a genuine appetite for gaming in Muslim-dominated territories. Players who reside in, or directly descend from, a host of Middle-Eastern nations regularly frequent countries like Cyprus, Georgia, and even the United Kingdom for wagering purposes. This notion is further consolidated when you account for dual citizenship circumvention. Indeed, many locals, seemingly unable to access gambling facilities in their native state, deploy secondary passports to hoodwink the system.

Crucially though, this is perhaps not enough to suggest that a fresh wave of gaming enterprise is about to wash over the Middle-East. And, even if this did materialise, it seems there wouldn’t necessarily be favourable reaction from its predominantly Muslim inhabitants. The examples cited provide enough ammunition to suggest some level of positive reception is likely, but the generational legacy throughout this region suggests establishing an industry would be incredibly difficult dynamic to integrate. Indeed, it seems entirely at odds with the cultural fabric of the area.

This sentiment is further heightened in the Gulf. The United Arab Emirates’ recent proclamations of social reform, and indeed the welcoming of some of the U.S’ most prolific operators, could be a sign of some modest movement within this territory. However, it’s entirely unlikely that this will pre-empt a ripple effect in some of the world’s most conservative countries.

Ras Al Khaimah may have mobilized, and Dubai are well-positioned to join, but a holistic reversal of the Middle East’s innate stance to gambling seems a mountain too difficult to summit. Dubai’s associated projects have been in-play for a considerable period, and the outputs of this lucrative industry are frequently, and compellingly, well-documented. Indeed, it’s entirely plausible that, if a radical change in stance was to emerge, this would have occurred a substantial period of time ago.

However, one must concede that the United Arab Emirates, in isolation, may end up being an exclusive facilitator of gaming activity in the region. If this does happen, which, in fairness, looks increasingly likely, this would still symbolize a seismic shift inwhat has been a largely steadfast conservative nation to press.

This may not be the gaming industry’s very own Arab spring, but it couldwell be an immensely lucrative step into a hitherto untapped commercial landscape.

UKGC Fines 888 £9.4 million For Failures

Online gambling firm 888 will pay a £9.4m fine after a Gambling Commission investigation revealed social responsibility and money laundering failings.

888 UK Limited, which operates 78 websites including 888.com, has also received an official warning and will undergo extensive independent auditing.

This is the second time 888 UK Limited has faced enforcement action – in 2017 they paid a £7.8m penalty package for failing vulnerable customers.

Andrew Rhodes, Gambling Commission Chief Executive, said: “The circumstances of the last enforcement action may be different but both cases involve failing consumers – and this is something that is not acceptable.

“The fine is one of our largest to date, and all should be clear that if there is a repeat of the failures at 888 then we have to seriously consider the suitability of the operator to uphold the licensing objectives and keep gambling safe and crime-free.

“Consumers in Britain deserve to know that when they gamble, they are participating in a leisure activity where operators play their part in keeping them safe and are carrying out checks to ensure money is crime-free.” Nevada Monthly Figures Keep Hitting $1 Billion

After an incredibly challenging 2020, and an uncomfortable start to the previous calendar year, Nevada’s gaming market feels like its now firmly on the path to full recovery. In accordance to recent results announced by local regulator, the Nevada Gaming Board Control (NGCB), state casinos registered nearly $1.1bn in gaming revenue for the first month of 2022. Staggeringly, this is the eleventh, consecutive month in which Nevadan operators have generated over $1bn within this metric.

January’s figures saw a 42% uplift on the previous year, which was blighted by a raft of coronavirus restrictions, as well as public reluctance to visit bricks-and-mortar establishments. Perhaps more importantly, recent trends suggest that the Strip is showing signs of returning to its former glory.

Reviewing the data, we see that the Strip even outpaced the state’s impressive overall performance, delivering a colossal 77% revenue increase on January 2021. Moreover, this was also a 6% improvement on the like-for-like period in 2019, well before the onset of the coronavirus pandemic.

However, Las Vegas footfall is yet to stabilize. Despite visitor numbers inclining sharply over the last twelve months, there is still a 28% discrepancy between January 2022 figures and those recorded three years earlier. Although this further demonstrates the achievement of delivering a 6% upturn in revenue, it still casts a cautious light on consumer confidence. Furthermore, takings haven’t quite hit the levels set in early 2020, delivered in the final moments before the pandemic took hold.