The United Arab Emirates (UAE) General Commercial Gaming Regulatory Authority (GCGRA) launched its official website and issued its first federal lottery license, in a move hailed as a significant step towards legitimizing the Emirates’ commercial gaming sector.
This landmark decision positioned the UAE as the first Gulf state to legalize gaming.
The GCGRA has provided comprehensive details on commercial licensing procedures, types of licenses, and the definition of commercial gaming, with its website also profiling key regulatory personnel and announcing the recipient of the UAE’s first federal lottery license.
The initial lottery license has been awarded to The Game LLC, a subsidiary of Abu Dhabi-based Momentum. Operating under the brand “UAE Lottery,” The Game LLC is the first entity to be licensed by the GCGRA.
Jim Murren, the Chairman of the GCGRA, commented in a dispatch by the operator that the launch of the UAE Lottery is a “pivotal event” that not only marks the establishment of a disciplined world-class regulatory framework for lottery activities but also underscores a commitment to nurturing a “secure and enriched commercial gaming environment in the UAE”.
According to CBRE analysts, the launch of the official GCGRA website and the publication of licensing procedures represent a ‘significant step forward in legitimizing and adding transparency’ to the UAE’s commercial gaming industry’.
‘This development is expected to alleviate skepticism within the investment community regarding the legalization of commercial gaming in the UAE,’ a CBRE dispatch comments.
Headquartered in the city of Abu Dhabi, the GCGRA holds exclusive jurisdiction to regulate, license, and supervise all commercial gaming activities and facilities in the UAE.
The licensing procedures outlined on the website include references to land-based gaming facilities, indicating potential plans for integrated resorts (IRs) in the UAE. Commercial gaming is broadly defined to include slots, table games (such as blackjack, roulette, baccarat, craps, poker), lottery, internet gaming, and sports wagering.
Lottery regulation and market potential
CBRE analysts also posited that regulation of lotteries was anticipated, given the UAE’s history of grey market operations and existing customer acceptance.
‘Despite the first license being granted to a local company, opportunities for larger international lottery operators to establish partnerships in the UAE remain viable. This approach is consistent with practices in other global lottery jurisdictions,’ the dispatch added.
The Game LLC’s lack of direct public investment opportunities means that the initial news serves more as a confirmation of the UAE’s evolving commercial gaming market rather than an immediate investment opportunity.
While key economic details such as Gross Gaming Revenue (GGR) tax and royalty rates remain undisclosed, the licensing framework was said to provided useful insights, notably, gaming licenses may be perpetual, provided operators remain compliant.
‘Although there appears to be an initial term with a set expiration date, the renewal process seems administrative, making the UAE licensing environment more stable and predictable compared to other regions like Macau and Singapore. This predictability could lead to higher valuation multiples for UAE commercial gaming operations’, the dispatch stated.
The brokerage also considered that the weekend’s regulatory progress could expedite debt financing solutions for Wynn’s IR project in the region, the Al Marjan Island.
Overall, CBRE analysts considered that the UAE remains a ‘highly attractive global gaming opportunity’.
‘The GCGRA, staffed by experienced gaming veterans, has been diligently developing industry-leading regulations, now coming to light. The detailed and thorough licensing process should be well-received by investors seeking transparency in this expanding market’, the dispatch comments.
