Wynn Sees UAE Spend of $900M, Confirms Interest in Thailand Casino

Wynn Resorts (NASDAQ: WYNN) expects to contribute approximately $900 million to the Wynn Al Marjan Island integrated resort in Ras Al Khaimah, United Arab Emirates (UAE).

Wynn Resorts
Wynn and Encore on the Las Vegas Strip. The operator said it will spend $900 million in the United Arab Emirates and that it’s interested in a Thailand casino. (Image: Luxury Lifestyle Magazine)

That’s according to comments made by Craig Billings on the gaming company’s first-quarter earnings conference call late Tuesday, and that estimate is in line with the operator’s minority stake in the $4 billion project.

Budgets move here and there, but no substantial movement. Our capital contribution will be round numbers, call it, $900 million, that heavily depends on the construction leverage,” said Billings in response to a question from CBRE analyst John DeCree. “So we’re in the midst of figuring that out now. But you can figure something like 50-50 debt to equity and then we would be 40% of the equity.”

Wynn’s local partners in the UAE are Marjan LLC and RAK Hospitality Holding LLC., while Wynn Design and Development is running creative and design operations.

Wynn Making Fast Progress on UAE Casino Resort

Billings’ comments regarding Wynn’s financial commitments to the UAE  project arrived after the Las Vegas-based company said construction there is advancing rapidly and that the hotel tower could be topped off in late 2025.

Wynn Al Marjan Island could be the first casino hotel in the Middle East North Africa (MENA) region and, if it’s approved to operate a gaming venue, it could be a significant long-term earnings driver for Wynn while potentially touching off a spate of casino development in the Emirates. The property is expected to command 5.6 million square feet, but the casino would account for just 4% of that space.

Billings called Wynn Al Marjan Island “a meaningful high return on investment (ROI) project” while adding that more updates could be made public later this year. Last year, Wynn said the UAE endeavor can generate up to $600 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) — a forecast that’s not been altered.

Additionally, gaming won’t be the centerpiece of the integrated resort. Dubai, which is located just an hour away from Al Marjan Island, is one of the most visited parts of the Middle East, and the tourists that flock to the emirate embrace high-end dining options, luxury retail, and other glitzy amenities, all of which are synonymous with Wynn’s Las Vegas properties.

Wynn Interested in Thailand, Too

Against the backdrop of a rapidly evolving regulatory process in Thailand, Billings confirmed Wynn is monitoring that situation and could eventually make a play to open a casino resort in the Southeast Asian country.

In Thailand, it’s early days and we have yet to see the regulatory and licensing structures,” said the Wynn chief executive officer on the earnings call. “Thailand is already a major tourism destination with significant tourism infrastructure and a world-class service culture. So we will continue to closely monitor advancement of the legalization process. I remain incredibly bullish about the future of our company.”

Billings added that Thailand is a compelling market with sound infrastructure and a robust tourism industry while acknowledging a variety of gaming companies could pursue casino licenses there.

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Playtech Extends Strategic Agreement with NorthStar in Ontario

Established iGaming industry stakeholders Playtech and the NorthStar Gaming Holdings extend the strategic partnership from June 2023 to reinforce their operations in the growing Ontario market. Their respective verticals, Playtech Software Limited and the NorthStar Ontario, will be able to exclusively focus on the operating goals set after Playtech has agreed to funnel CA$3.0m (US$2.2m) in short-term financing to NorthStar to facilitate player pool expansion in Ontario.

$4.0 Million Financing Facility

The original strategic agreement signed in June 2023 included a complete availability of Playtech Software’s services for the operator. The facility valued at $4.0 million was a key driver for NorthStar to increase its presence in the Canadian province in 2023 and grow revenues accordingly.

Six-Month Extension

The strategy seems to have proven successful as the deal is now extended. Under the extension, Playtech Software will continue with the provision of similar marketing services once again valued at $4.0 million. The renewed contract has been set for a six-month performance and will run through 31 October 2024.

Reimbursement Plan

Under the agreement, NorthStar will use the short-term financial facility to boost its marketing activities and repay the funds to Playtech Software from the income generated over the contract period. The operator will benefit from the balance between the revenue generated and the six-month financing cost, while the provider may benefit from the financing conditions.

Financing Ontarian Expansion

playtech_renews_ontario_deal_with_northstarAs for these conditions, NorthStar has already issued a $3.0m unsecured, interest-bearing promissory note to Playtech, with interest rate of 8.0% per annum, payable in arrears at maturity. According to NorthStar, the investment will help the company’s balance sheet adjustments and continued expansion in Ontario.

NorthStar chair and CEO Michael Moskowitz commented: “We are very pleased to continue to strengthen our relationship with Playtech, one of the world’s leading gambling technology companies. Their ongoing support has been instrumental in helping us to acquire new customers, provide a premium online gaming experience and fund the expansion of our brand in Ontario and across Canada.”

$12.25 Million Investment Boosts Collaboration

The extension of the 2023 strategic agreement comes after Playtech agreed to make a $12.25 million strategic investment in the NorthStar Ontario-based online casino and sports betting facility a few months earlier. In fact, the strategic partnership between the two companies dates back to December 2021. Since then, Playtech has supported NorthStar and the the existing contract for software and services has now been extended by 10 years.

Repayment Guarantee

Playtech’s investments are converted into equity and warrants related to Baden Resources Inc, a company acquired by NorthStar in March 2023.In this way, Playtech holds around 16% of shares belonging to NorthStar, as well as warrants to potentially acquire above 20% stake in this company. The transaction is additionally secured by the inclusion of Playtech’s chief financial officer Chris McGinnis in the board of directors of the subject entity.

Source: “Playtech renews Ontario deal with NorthStar and advances financing’’. iGaming Business. April 29, 2024.

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Las Vegas-Bound Passenger Accuses JetBlue Workers of Anti-Semitism

A Jewish passenger claims JetBlue employees were anti-Semitic after a flight attendant wearing a “Free Palestine” pin acted provocatively toward him, according to news reports.

Paul Faust, at left, Rachelle Almagor
Paul Faust, at left, and Rachelle Almagor, pictured above. The two JetBlue passengers claim a flight attendant was anti-Semitic. (Image: DailyMail.com)

Paul Faust, 54, of Parkland, Fla., was on an April 28 flight to Las Vegas when he noticed a flight attendant was wearing several pins on her uniform. Faust chose not to say anything about the Palestine-related pin, which had a Palestinian flag attached.

A short time later, the flight attendant put on an apron when she began serving drinks. She chose to place only the “Free Palestine” pin on the apron. Other pins, including one for “Black Lives Matter” remained on her uniform.

Faust, who has a visible Jewish-themed tattoo, was concerned that by choosing only to move the “Free Palestine” pin to the apron, the flight attendant was being provocative and “deliberate.”

Faust spoke to a supervisor on the flight and suggested that the flight attendant with the pin be spoken to after the flight landed at Harry Reid International Airport. He wanted to avoid an “issue.”

“Just talk about how it was maybe a little insensitive, it made me feel a little uncomfortable,” Faust reportedly told the in-flight supervisor.

JetBlue Called Cops

But when the flight landed, an airline official accosted Faust in the terminal and told him he was calling the Las Vegas Metropolitan Police Department (LVMPD) because Faust allegedly created a “disturbance” on the flight.

The employee demanded Faust produce an ID. Faust, claiming the accusation was a lie, refused to provide an ID, and left the airport.

The next day, when he was checking on his return flight to Florida, Faust discovered he had been banned by the airlines for the previously booked flight. A representative later told him it was because he had created a disturbance on the April 28 flight.

The in-house notes on the incident also included a claim by the flight attendant that Faust said, “everyone should go to Gaza so they can be killed.’

Faust said he never spoke to the flight attendant. He was speaking privately to another Jewish passenger, identified by DailyMail.com as Rachelle Almagor, about issues related to Israel.

Almagor also told DailyMail.com that she too was asked for an ID in the terminal. She was shaken up by the incident and chose not to fly back to Florida on JetBlue.

She wants the involved flight attendant fired, according to DailyMail.com.

My daughter lost her best friend in Gaza. He was kidnapped and murdered. So, it was very uncomfortable for me to have to see that Free Palestine pin,” she told DailyMail.com.

Faust, who flew back to Florida on another airline, has described the incident as “blatant antisemitism,” the New York Post reported. “Not a good look JetBlue.”

He sent an email to the CEO of JetBlue and posted two videos on social media about the incident.

JetBlue Apologizes, Investigating

JetBlue revealed this week it’s investigating the claims.

JetBlue does not tolerate discriminatory conduct, and we are committed to providing a respectful and welcoming environment for all our customers and crewmembers. We are taking this matter very seriously and conducting a full investigation into our crewmembers’ actions. We will take appropriate action once our investigation is complete as a result of non-compliance with any JetBlue policies,” the airlines said in a statement to Casino.org.

JetBlue said it apologized to Faust, who is a member of the airline’s frequent flier program.

JetBlue also is changing its policy on pins.

“We have changed our uniform policy to make clear that on board the aircraft is not the right place for crewmembers to advocate positions on certain issues or political topics. Going forward crewmembers will only be permitted to wear pins approved or issued by JetBlue,” the statement added.

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1 Main Capital Bullish on Caesars Entertainment Stock

Shares of Caesars Entertainment (NASDAQ: CZR) are down 24.64% year-to-date while the S&P 500 is higher by 7.57%, but some members of the buy-side community are enthusiastic about the casino operator’s prospects.

Caesars Stock
Flamingo on the Las Vegas Strip. 1 Main Capital is bullish on operator Caesars Entertainment stock. (Image: Vegas Means Business)

In a recent letter to clients, 1 Main Capital founder and portfolio manager Yaron Naymark noted the boutique investment firm established a new position in Caesars in the first quarter and that stock is now among the money manager’s top five holdings. One of the reasons for 1 Main’s enthusiasm for Caesars is the gaming company’s interactive arm, which includes online sports betting.

On the digital side, CZR has invested heavily in marketing and promotions to acquire customers over the last three years,” wrote Naymark. “Cumulative burn in this segment has been more than $1 billion in 2021 and 2022 combined. However, the digital business finally turned marginally profitable in 2023 and management expects that it should grow to $500 million of annual EBITDA within the next couple of years.”

When the Harrah’s operator reported first-quarter results last week, it told investors that some bad luck on the Super Bowl and March Madness hindered its interactive results to start the year, but it remains constructive in its long-term outlook for that business.

1 Main Capital Believes Caesars CapEx Will Pay Dividends

Like many of its competitors, Caesars is in the midst of significant capital spending cycle, including the introduction of new venues and enhancements to established gaming properties.

Caesars Danville in Southern Virginia came online about a year ago and the operator is in the process of transitioning Harrah’s New Orleans to Caesars Palace branding. The gaming company is also spending to spruce up casino hotels in Atlantic City, among other locations. Naymark believes those efforts could pay long-term dividends.

“On the physical side, CZR has deployed well over $1 billion into new and existing growth projects. This includes $650 million spent to build a new property in Danville, VA,” observed the 1 Main founder.  “It also includes $400 million for upgrades to its properties in Atlantic City and an additional $400 million for upgrades to its New Orleans locations. Typically, the company expects at a 15%+ return on such growth projects, though they caveat that Atlantic City will probably come in below that figure.”

On the company’s earnings conference call, Caesars CEO Tom Reeg noted the operator could consider selling some “non-core” gaming venues that aren’t significant generators of free cash flow and such transactions could materialize at some point this year.

Speaking of Free Cash Flow…

Free cash flow (FCF) potential has been central to the Caesars investment thesis for several years and with the stock sporting a FCF yield of 12% and free cash expanding, some analysts believe the shares are undervalued.

1 Main Capital’s Naymark believes Caesars’ long-term FCF trajectory is compelling and could be significantly accretive to the share price.

“In a few years, CZR should be able to generate $2 billion annual free cash flow, or $9 per share. At that point, digital will still be growing nicely. As this happens, I believe that the stock should be substantially higher than its current levels,” concluded the investor.

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Donald Trump Jr. Shines Light on Alabama Gaming Expansion Deadlock

Donald Trump Jr. is headed to Alabama next week to rally on behalf of his father’s 2024 campaign. Before departing for the Cotton State, the former president’s eldest son took to X to weigh in on efforts to allow Alabamans to have a say on whether to expand gambling.

Donald Trump Jr. lottery casino gambling sports betting
Donald Trump Jr. thinks lawmakers in Alabama should step aside to allow voters to decide the outcome of ongoing considerations to expand gambling. The legislature is deadlocked about what forms of gambling should be presented to voters through a ballot referendum. (Image: Bloomberg)

The Alabama Senate and House of Delegates had significantly different opinions on how the state should go about authorizing new forms of gambling during the legislative session this year.

The House proposed up to six commercial casinos and four tribal casinos with slot machines, table games, and sports betting. The House bill also recommended the creation of a state-run lottery.

The Senate overhauled the statute to include only three tribal casinos with slots and table games and seven racinos where slot-like historical horse racing (HHR) machines would operate at the state’s former pari-mutuel greyhound tracks and new facilities. While a lottery remained in the Senate version, sports betting became excluded.  

A conference committee last week recommended that a compromise be passed.

The proposal from the six-member panel endorsed three tribal casinos with slots and table games. Up to seven racinos would be allowed only electronic gaming machines but not live dealer tables. Sports betting would remain on the sidelines for both the racinos and tribal casinos. A lottery creation remained.

DJT Jr. Comments

The House of Delegates subsequently ratified the conference committee’s recommendations but the Senate fell a vote shy of the three-fifths majority needed to initiate the referendum. The Alabama Constitution currently prohibits such gambling, meaning voters must amend the state’s fundamental principles to allow the Legislature to legalize new forms of gambling.

Trump Jr. thinks it’s time state lawmakers in Montgomery step aside to allow voters to have the final say on the gaming discussions.

I’m excited to be in Alabama next week for a fundraiser for my dad, but whenever I ask anyone from there what’s going on in the state, this is all they talk about,” Trump Jr. said about the ongoing gaming and lottery talks. “Why is their Senate refusing to let the people vote on a clean bill to legalize the lottery and fund education when 45 states already do it?”

Trump Jr. asked why Alabama lawmakers wouldn’t rather keep the “billions of $$$ in Alabama instead of sending it to other states? Makes no sense to me!”

Gov. Kay Ivey (R) agrees. She recently voiced her opinion that “it’s time for voters of Alabama to have their say.”

Surprising Holdout 

State Sen. Greg Albritton (R-Atmore) has long advocated for legal casino gambling and a lottery. He served on the gaming conference committee but was among the 15 “no” votes in the Senate that stalled the gaming package by a single vote in the upper chamber.

Albritton’s district includes Wind Creek Atmore, one of three Class II tribal casinos run by the Poach Band of Creek Indians. Albritton said he was overruled in seeking to provide the tribe with an opportunity to build a casino off sovereign land in Northeast Alabama to draw in players from Georgia and Tennessee where casinos remain absent.

Albritton said the exclusion of a commercial casino for the state’s lone federally recognized tribe prompted his “no” vote.

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