The United Arab Emirates (UAE) has awarded a lottery licence for the first time, potentially taking another step towards legalising casinos and other kinds of gaming in a market that’s being closely eyed by Las Vegas operators.

The country’s General Commercial Gaming Regulatory Authority (GCGRA) said a firm called The Game LLC will operate under the banner of the UAE Lottery. The company, it said, is a “a commercial gaming operator specialising in game development, lottery operations, and gaming-related content”.

The GCGRA didn’t say when the lottery is likely to start or in what form. The Game, whose website says it’s based in Abu Dhabi and privately held, didn’t respond to a request for comment.

While this would be the first licence issued by the government allowing lotteries, the country has long allowed raffle draws in supermarkets, airports and malls - with prizes worth millions of dollars at times. Some raffle tickets are also sold by local banks and Dubai airport’s duty free, though the government recently asked some of the largest organisers to suspend activities. 

The latest move is a “pivotal event”, Jim Murren, the chairman of the GCGRA, said in the 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 Islam and is illegal in the country. Legalising it would be a step change for the UAE where Islamic, or shariah law, is the main basis for legislation.

Over the past year, authorities have established a federal body to regulate gaming. That came after Las Vegas-based Wynn Resorts Ltd - which is building a US$3.9 billion gaming resort in the emirate of Ras al Khaimah - said it expects to “soon” obtain a licence.

Legalising gambling could draw in more tourists and investment from China, as well as generate gaming revenue equivalent to 1.3% of gross domestic product for the UAE, according to Bloomberg Intelligence. At roughly US$6.6 billion, that would surpass the figure for Singapore, BI analysts calculate.

Faced with increasing competition from neighbours such as Saudi Arabia and Qatar over the past few years, Dubai, in particular, has introduced a series of reforms to keep its edge as the region’s top tourism and trade hub. That’s included offering long-term visas and allowing unmarried couples to live together.

The GCGRA said gaming companies can apply to operate in all seven of the UAE’s emirates. 

Abu Dhabi and Ras Al Khaimah have emerged as front runners to introduce casinos before neighbouring Dubai, after the glitzier city state put any immediate plans to allow gambling on the back burner, people familiar with the matter told Bloomberg News late last year.

  - Bloomberg