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Saturday, January 2, 2010

Double Down for Dubai

Dubai's financial woes have been in the news as of late. The city-state pinned its future on finance and real estate and we all know what happened to those two sectors on a worldwide scale. Unlike its dowdier but oil-rich sister to the South, Dubai has relatively few natural resources to fall back on as a safety net. Real estate values are plummeting and because of the global banking crisis, investment money is as scarce as hen's teeth.The bills are coming due and nothing short of a miracle and some charity from neighboring Emirates will ease the pain.

But wait....I have an idea!

What Dubai can do is what many financially beleaguered municipalities and governments around the world have done, legalize gaming! I realize that in this part of the planet, there might be more hurdles to jump than usual, but free-zones exempt from local laws already exist for other enterprises, why not a gaming free-zone? The World Islands would be perfect. They are offshore, currently empty and access could be easily controlled. Residents could be required to obtain a gaming license much like that for alcohol purchases. Visitors could be whisked from the airport to the casinos on the islands without ever having step foot in the city proper, their indulgences all but invisible to those that might take offense.

Dubai is a natural for becoming the Las Vegas of the Eastern Hemisphere. The original Las Vegas is also located in a barren desert bereft of natural resources, without gaming it would be little more than a desolate crossroad village where watching tumbleweeds blow across the dusty streets is the main form of entertainment. Dubai already has the infrastructure, glitz and attitude to easily cross the line. Additionally, Dubai's central geographic location between Europe and Asia and the beautiful waters of the Arabian Gulf are  advantages.

As we all know, the Las Vegas formula works. The city is a favorite destination of travelers from all over the world. These people happily drop their kid's college fund money in games that they know the casinos have the edge, but return time-and-time again because it is fun! All this activity also provides a fertile ground for support businesses such as food providers, cabbies, entertainers and such.

In fact, gaming is so profitable that the state of Nevada, where Las Vegas is located, sees no need to tax its residents' income, one of the few states in the US with this policy. Dubai seems to agree as at least two government owned businesses, Dubai World and Nakheel, are major partners in several new Las Vegas developments.

I am just free-associating here and I know it would be a hard sell to the powers that be, but allowing gaming has proven successful for curing financial woes in many other venues. Never underestimate what people will spend to satisfy their vices. I will be available for the position of Dubai Gaming Commissioner when the time comes.


Anonymous said...

There is already an eastern vegas, it's called hong Kong.

Sir, with constant debate on whether the UAE should even allow alcohol and pork (Both by normal citizens AND members of the FNC,) gaming is surely not going to be allowed.

And if you look at "Dubai's" issues from a UAE perspective, it's not in any trouble. and it is feeling the heat for political reasons. the fragile/strong (dont ask) ties between abu dhabi and dubai are interesting.

Ace said...

Macau is also a big gaming destination in S.E. Asia. 40% of its GDP comes from casino revenue. Mostly rich, hard-core Chinese gamers go there.

I realize that gaming legalization is a long shot in the UAE although the Dubai government is heavily invested in the casino/gaming biz in the US.

Also, stock market exchanges are the biggest casinos in the world and I believe there are a few of those here in the UAE. There is a fine line.

As with any economy dependent on real estate values and financial services, how can you say that Dubai (or the US for that matter)is not feeling some pain?

I agree that the ties between Abu Dhabi and Dubai are indeed intriguing due to the secrecy,family ties and what is at stake. A lot of behind the scenes stuff going on. I am sure everything will be OK in the end.

Bush Mechanic said...

If I owe the bank 300,000 dollars, that is a big problem for me, especially if I'm struggling to pay. Interestingly, the problem doesn't scale up with the size of the debt. For instance, if I owe the bank 10 billion dollars, I think it is the bank who now has the biggest problem. My skin isn't worth that much.

Dave said...

I think the idea has real valid merit. But Dubai is bearly tolerated by some of the hard-line fundamentalists in the region, and this would probably tip them over the edge with rage.

But the possibilities are endless...

Neil Roberts said...

Before we moved out here we went to Dubai on vacation. I thought I would treat Caz to Valentines dinner at the Burj al Arab (I can still feel my wallet crying).

We went to the restaurant at the top, where the cross piece juts out. I commented to someone about how garish the decor was in there. I was told that it was because originally it had been designed to be a casino. That is also the reason it was built "offshore" on a small "island". However, after it's completion - or at least after it was too late to change the decor - they failed to get the license that had originally been promised. The area was turned into what is now the sky bar.

I don't know if this is just folklore, but it sounds feasible.

Ace said...

I have no doubt that some in high offices have had this idea cross their minds. There are probably some blueprints somewhere depicting casinos planned for "The Burj" and/or Atlantis. I tend to believe your story. "The World" islands would be ideal for such an enterprise.

Dubai is a perfect venue for ultra high-rollers. Everything is in place except for national sentiment (which I understand). That may never change but we will see how bad the financial pain gets before some options are considered.

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