The United Arab Emirates has awarded its first lottery license, a move that could pave the way for the eventual legalization of casinos and other forms of gaming in the country. The General Commercial Gaming Regulatory Authority (GCGRA) announced that The Game LLC will operate under the UAE Lottery banner.
The Game LLC, a subsidiary of Momentum, an Abu Dhabi-based firm, is privately held and was described by the regulator as “a commercial gaming operator specializing in game development, lottery operations, and gaming-related content.” Details regarding the start date and format of the lottery have not been disclosed.
Although this marks the first government-issued lottery license, the UAE has long permitted raffle draws in various locations such as supermarkets, airports, and malls, with some prizes reaching millions of dollars. Local banks and Dubai Airport’s duty-free shops have also sold raffle tickets, though the government recently asked some of the largest organizers to suspend their activities.
The latest development is a “pivotal event,” Jim Murren, chairman of the GCGRA, said in a statement. It “marks the establishment of a disciplined world-class regulatory framework for lottery activities but also underscores our commitment to nurturing a secure and enriched commercial gaming environment in the UAE,” he said.
Gambling is prohibited under Islamic law and is illegal in the UAE. Legalizing it would be a significant change for the country, where Islamic law is the main basis for legislation. Over the past year, authorities have established a federal body to regulate gaming, following an announcement by Las Vegas-based Wynn Resorts Ltd. about a $3.9 billion gaming resort in Ras al Khaimah, which expects to “soon” obtain a license.
Legalizing gambling could attract more tourists and investment from China and generate gaming revenue equivalent to 1.3% of the UAE’s gross domestic product, according to Bloomberg Intelligence. This could amount to roughly $6.6 billion, surpassing Singapore’s figures.
“The GCGRA is steadfast in its commitment to global best practices in consumer protection and regulatory oversight,” said Kevin Mullally, the regulator’s chief executive. “Our regulatory framework is designed to ensure the integrity, fairness, and transparency of commercial gaming activities in the UAE, including lottery games.”
The regulations governing the UAE Lottery are not yet publicly available. However, sources have indicated to media that payout rates are set between 40% and 60% of ticket sales, and that a single-digit tax will be applied to revenue, alongside the UAE’s 9% corporation tax. The Game LLC will also pay a high fee for a 10-year license.
Notably, the UAE’s two prominent lottery operators, Emirates Draw and Mahzooz, were not selected to run the national lottery. Both companies paused operations at the GCGRA’s request and submitted applications, spending the interim period enhancing their internal systems or operating in other markets.
The invitation to apply and the request to shut down operations were issued in late December, with a submission deadline in early January.
With the lottery license issued, the GCGRA’s next focus includes licensing integrated resorts and launching a regulated iGaming market. Construction is already underway at Wynn’s Ras Al-Khaimah resort, although the licensing timeline remains unclear. Wynn CEO Craig Billings described the UAE as “the most exciting new market opening in decades” following the company’s Q3 results announcement last November.
As other operators finalize plans for their own resorts, Wynn expects to maintain a first-mover advantage for several years. Abu Dhabi is likely to announce plans next, with interest from operators like MGM Resorts, Caesars, and Macau concessionaires.
Original article: https://www.yogonet.com/international/noticias/2024/07/29/73581-uae-awards-first-lottery-license-paving-the-way-for-further-gambling-legalization
