Universal Entertainment, listed in Tokyo, conveyed its cautious stance on the domestic integrated resort license in Japan at the recent shareholders' meeting. Facing the second round of IR bidding window reopening in May 2027, this company, founded in 1969 by Japanese billionaire Kazuo Okada, responded to shareholder concerns with a carefully worded statement: there are opportunities, but the stance remains cautious, and there is no conclusion yet on whether to join a consortium or finalize the investment structure. Behind this statement lies the deteriorating financial situation of Universal Entertainment's core asset, Okada Manila. In 2025, the gross gaming revenue of this integrated resort in the Philippine capital fell by 20.1% year-on-year to 27.81 billion pesos (approximately 463.6 million USD), and EBITDA plummeted by 44% year-on-year to 4.27 billion pesos. In December last year, S&P Global downgraded Universal Entertainment's credit rating from B to B-, directly pointing to the poor performance of its casino resort business in the Philippines. For a company weighing whether to invest billions of dollars in a domestic IR license, the bleeding of Manila's cash cow undoubtedly makes the decision-making scale even heavier.
The Dilemma of Manila's Bleeding and Japan's High-stakes Gambling
Universal Entertainment holds a delicate position in the Japanese IR race. As a domestic gambling equipment manufacturer that has been deeply involved in the pachinko and slot machine sectors for decades, and with nearly ten years of physical casino operation experience through Okada Manila, it should theoretically be one of the most confident players competing for a domestic license. However, the investment threshold for Japan's IR is in the billions of dollars, with the first round's sole approved project, MGM Osaka, having a total investment of 10 billion USD and expected to open in 2030. The Nagasaki project was rejected due to financing issues, highlighting the regulatory body's stringent requirements on the financial strength of bidders.
The performance downturn of Okada Manila coincides with the critical period when Universal Entertainment needs to demonstrate its financial muscle. The gross gaming revenue fell from 34.8 billion pesos in 2024 to 27.8 billion pesos, and the EBITDA margin further narrowed from about 15% in 2024, dragging down the parent company's consolidated financial statements and directly triggering a credit rating downgrade. Although S&P maintained a stable outlook, the B- rating means that Universal Entertainment's financing costs in the capital market will be significantly higher than its competitors. For long-term projects like the Japanese IR, which require continuous capital injections, every reduction in financing capability could translate into a substantial disadvantage in future license bidding.
Only one project broke through in the first round, the second round competition becomes more pragmatic
The results of the first round of Japan's IR bidding have set a clear baseline for the market: only one of the three licenses was issued, with financing feasibility and operational qualifications being the core selection criteria of the regulatory body. MGM Osaka succeeded with the global operational experience of MGM Resorts and the local financial resources of Orix, while the Nagasaki project led by Casinos Austria fell at the financing hurdle. The second round of bidding is scheduled from May to November 2027, leaving less than a year and a half for observers to prepare.
Universal Entertainment did not completely close the door to bidding at the shareholders' meeting, but its cautious wording was clear enough. The company specifically mentioned in its statement that it is evaluating multiple factors including regulation, finance, and partners, suggesting that its internal assessment framework is far more complex than outsiders might imagine. On one hand, Universal Entertainment has the geographical advantage and government relations of a domestic company; on the other hand, the cash flow restoration of Manila assets and the recovery of credit ratings both require time, and once a capital commitment is made for an IR bid, it is difficult to retract.
PASA official website continues to track the development and financial dynamics of integrated resorts and gambling enterprises in the Asia-Pacific region, noting that Universal Entertainment's current situation is quite representative among regional gambling giants. When core assets face adjustments in customer structure and revenue pressure, adopting a conservative financial stance to cope with incremental capital expenditures has become a common choice for many operators. Whether the second round of Japan's IR bidding can attract more capable domestic players may not depend on their judgment of the domestic market potential, but on whether their overseas assets can self-repair before then.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
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