Universal Entertainment ‘cautious’ on Japan IR bid
Universal Entertainment has signalled a cautious stance towards entering Japan’s next round of integrated resort (IR) licensing, despite the government confirming a fresh application window for 2027.
The Tokyo-based group, which operates Okada Manila, acknowledged the opportunity presented by Japan’s evolving casino market but stopped short of committing to a bid. During its annual general meeting in March, the company indicated that no decisions had been made regarding participation in a consortium or the structure of any potential investment.
Japan reopens IR race for 2027
Japan is preparing for its second round of IR applications, scheduled to run from May to November 2027. The timeline was formalised through a Cabinet Order issued in March 2026, marking the first reopening of the licensing process since the initial round concluded in 2022.
That earlier phase resulted in just one successful bid, with MGM Resorts International and Orix Corporation securing approval for the Osaka project, leaving two licences still available.
Okada Manila downturn raises concerns
For Universal, the domestic opportunity might appear strategically aligned. Founded by Kazuo Okada, the company has deep roots in Japan’s gaming and amusement sector, particularly in the manufacturing of pachinko and pachislot machines.
However, recent performance challenges at Okada Manila have raised questions about the group’s readiness to pursue another large-scale development. Last year, the Manila resort recorded gross gaming revenue (GGR) of PHP27.81 billion ($464 million), representing a decline of more than 20 per cent year-on-year. Earnings before interest, taxation, depreciation and amortisation dropped by 44 per cent over the same period.
Ratings cut amid persistent underperformance
These headwinds for Universal Entertainment have drawn scrutiny. Last year, S&P Global analysts downgraded Universal’s credit rating, citing ongoing underperformance in its Philippine operations. Meanwhile, analysts maintained a stable long-term outlook for the company.
Reports said that the company’s management has since prioritised improvements in service quality and staff training at Okada Manila, identifying customer satisfaction as central to restoring earnings.
Diversification strategy takes shape
Universal is also reportedly advancing plans to diversify its revenue base. The company said is developing a new gaming machine business as a third core segment, building on its expertise in entertainment technology and integrated resort management.
The initiative is intended to create additional market opportunities and reduce reliance on any single geography or business line.
Strict rules and local politics shape bids
Japan’s IR framework was established under legislation enacted in 2018. The framework requires collaboration between private operators and local governments. Bids must demonstrate economic benefits, tourism impact, and safeguards against problem gambling.
As in the initial round, any local government seeking to participate must partner with a private-sector operator before submitting a bid. According to the set framework, proposals must detail a comprehensive IR development that combines casino gaming with other facilities such as convention centres, hotels, and entertainment attractions. These submissions are then evaluated by Japan’s national authorities based on factors such as projected economic benefits, contributions to tourism, and the robustness of safeguards to mitigate problem gambling.
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