The FDI angle:

• The first casino in the UAE is set to open in Ras Al Khaimah (RAK) in 2027. 
• It will cost $3.9bn — roughly a third of RAK’s GDP — and will be operated by Wynn Resort.  
• Why it matters? Competition for FDI in the UAE is heating up. Gambling remains illegal in the country, but the casino in RAK, which is expected to receive greenlight by a new gaming regulatory body,  may signal a bigger change and open up gambling to investment and tourists. 

As the clock struck midnight on January 1, 2023, the skies above Ras al Khaimah (RAK) were set ablaze as the emirate broke a world record for the highest number of drones launching fireworks simultaneously.

But on the ground, the emirate has set in motion the foundations for an even more unprecedented exhibition: a luxury casino in the Middle East. 

Located at the northernmost tip of the UAE, RAK is known for industry, ceramics and mountains. No stranger to foreign direct investment (FDI), several multinational chemical companies have set up shop in the emirate and, in 2020, the government allowed for full ownership of foreign firms operating in RAK. But having long stood in the shadow of more globally well-known emirates such as Dubai and Abu Dhabi, the reach of ‘Sin City’ is anticipated to change the world’s perception of RAK.

Viva Ras Vegas

The Las Vegas-based hotel and casino company Wynn Resorts is set to open a resort in RAK — the Wynn Al Marjan Island Ras Al Khaimah. This is expected to be the biggest FDI project in the emirate to date.

Sitting on an artificial island — which took nine years to build, starting in 2004 — the resort has a lot to live up to. At a cost of $3.9bn — roughly a third of RAK’s gross domestic product — it is expected to open in 2027.

“With this project, we really had a blank canvas from which to work. A man-made island is inherently malleable, allowing us to craft not only the property itself, but the entire landscape around the property,” said Craig Billings, CEO of Wynn, in an investor presentation in April. As gambling is illegal in the UAE, multiple sources tell fDi that the hotel’s offshore location is likely to make this circle easier to square.

Wynn, which has major resorts in Las Vegas and Macau, has partnered with developer Marjan Properties and holding company RAK Hospitality Holdings to create this resort. Clad in bronze glass, it will have roughly 1500 hotel rooms. 

In 2022, the RAK Tourism Development Authority (RAKTDA) established the Department of Entertainment and Gaming Regulation to cover licensing, taxation, operational procedures and consumer safeguards.

“The regulatory structure will address the entire gaming enterprise within integrated resorts, requiring compliance with all applicable laws and regulations (including financial crime laws) from operators, suppliers and employees,” the authority said in a statement.

Place your bets

Faisal Durrani, head of Middle East research at Knight Frank, said that the Wynn Resort is a “game changer” for the emirate and the region. 

“Ras Al Khaimah has come out of the starting gates,” he says. “It is positioning itself as a more affordable alternative to Dubai.” But, he adds, it is likely to “complement rather than compete” with the UAE’s emblematic city. “This is a beach holiday in a slightly quieter location.”

RAK’s tourism figures already illustrate that the government’s plan is working. It recorded its highest visitor numbers with more than 1.13 million arrivals in 2022 and a 40% increase in international tourists — according to RAKTDA. The Intercontinental Hotels Group and the Radisson are among the hotel groups that entered RAK for the first time last year. By contrast, Dubai received 14.36 million international overnight visitors in 2022 — with 1.8 million visitors from India alone.  

Among property investors, the prospect of a casino has drawn a mixed reaction. In a Knight Frank survey of 184 high-net-worth (HNW) individuals worldwide earlier this year, 55% claimed that the decision to open a casino in RAK has not affected their desire to purchase property in the emirate, while 30% of respondents said that the casino would make them more likely to make a property purchase in the emirate.

When broken down by location, 60% of HNW individuals from Singapore, China and Hong Kong said the casino made it a more interesting location to buy real estate, while investors from Saudi Arabia signalled they would avoid buying property in RAK on account of the casino. 

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Tourism challenges

It is not just a case of welcoming tourists or prospective property investors: RAK is on a push to attract more inbound investment. The RAK Economic Zone has already added 1500 new companies in the second quarter of 2023 — up 132% on the same period last year. In May, a delegation from the zone toured various cities in China to promote the benefits of setting up shop in RAK.

But, for now, it is the buzz on Al Marjan Island that is set to generate the most amount of activity. In June, US hotels group Marriott said it will bring its Le Méridien resort brand to the island in 2026. Last year, real estate company Aldar announced that it had bought land from the developer Marjan to build a beachfront development. 

Izzat Dajani, the founding CEO of the Investment & Development Office, the government’s sovereign wealth fund, says that this kind of “herd investing” is good for RAK. 

But as “nothing on Earth can happen without challenges”, the build-out of Al Marjan Island will come with the need for more infrastructure and the risk of unforeseen changes in market sentiment.

“Now there is a global boom in tourism and rates are ticking up dramatically. But demand can slow down and that’s beyond the control of any government incentive or foreign investor,” he says.

As for its place on the world stage, Mr Dajani stresses that RAK will retain its own unique charm. “If Dubai is a global city, on par with New York or Sydney, I think that Ras Al Khaimah will attract the global community but with the charm of a local Arabian city.”

This article first appeared in the August/September 2023 print edition of fDi Intelligence.