Posted on: January 13, 2025, 03:37h.
Last updated on: January 13, 2025, 03:37h.
Last week, Wynn Resorts (NASDAQ: WYNN) announced the acquisition of the Crown London, a small, private casino in the Mayfair District, and while it’s not the typical property-level purchase executed by a US gaming value, the deal has merit.
In a recent report to clients, CBRE Equity Research analyst John DeCree acknowledged that while the casino formerly known as Aspinalls doesn’t generate material cash flow and that London’s VIP casino market has been faltering since the start of the coronavirus pandemic five years ago, there’s logic behind the Wynn deal.
That said, we view this as a very strategic purchase for Wynn. Aspinalls caters to very high-end VIP gaming customers from London but also internationally, including from Asia, India and the Middle East, making it a very unique customer acquisition tool for Wynn Al Marjan Island,” wrote DeCree.
Financial terms of the transaction, which is expected to close in the second half of this year, weren’t revealed. Located in London’s Mayfair District, Crown is a members-only casino founded by John Aspinall. Australia-based Crown Resorts acquired the venue in 2011.
Crown London Buy Could Bolster Wynn UAE Debut
While the Crown London deal isn’t the norm for a US casino operator, the purchase could pay dividends for Wynn as it looks toward the opening of its United Arab Emirates (UAE) integrated resort in early 2027. CEO Craig Billings acknowledged as much.
“This acquisition of an iconic asset offers us a presence in a global gateway city and will create a conduit for Wynn guests to visit our resorts, particularly Wynn Al Marjan Island which is slated to open in the first quarter of 2027 in Ras Al Khaimah in the United Arab Emirates,” he said in a statement.
DeCree concurs that Crown London could be an important asset for Wynn in terms of bolstering brand awareness among clientele that would be apt to travel to UAE, including Indian bettors – a demographic that could prove more likely to travel to UAE than to Macau.
“Aspinalls hosts a regular Bollywood Night, and India is one of the top feeder markets for tourism to the UAE. This acquisition gives Wynn a flag in a gateway city that should help build the global database and boost Wynn’s brand power in the region ahead of a blockbuster opening in the UAE,” added DeCree.
Support for Wynn UAE Casino Matters
With Wynn Al Marjan Island slated to open in about two years and the hotel tower on the project scheduled to be topped off by the end of 2025, the first casino resort project in the history of the Arab world could galvanize shares of Wynn as this year moves along.
However, some analysts argue that to date, the investment community hasn’t priced the UAE opportunity set into shares of Wynn. That underscores the importance of leveraging the Crown London acquisition to drive traffic to the UAE casino hotel resort when it opens. Another implication could be that investors are missing something because by some estimates, the UAE could be the world’s fourth-largest gaming market when it fully ramps up. For his part, CBRE’s DeCree sees value in the Crown London buy as a marketing tool for Wynn.
“Importantly, this is a high-end gaming asset with high-intent customers, making it a more deliberate customer acquisition channel relative to a branded hotel strategy or partnership,” concluded the analyst.