Operator News

Philippines – Universal at an ‘exciting inflection point’ as headwinds clear

By Phil - 7 October 2019

Union Gaming believes that Japan’s Universal Entertainment is at an ‘exciting inflection point’ with its battle with former Chairman Kazuo Okada seemingly over.

Analyst John DeCree said Universal ‘can finally declare victory in its long and arduous legal battle with its former chairman Kazuo Okada as the highest Japanese appeals court for trust litigation upheld a ruling that essentially prevents Mr Okada from regaining any control of the company.’

He believes that along with the stabilisation of the company’s pachinko business and upturn in its Philippine casino, Okada Manila has all combined to leave the company in a ‘special situation.’

Mr. DeCree said: “As a safeguard, Universal has also undergone a corporate restructuring to prevent Mr Okada from having any control over the casino businesses even if he somehow regained a Board seat. While the legal battle will likely linger, it appears that there is virtually no way for Mr Okada to regain any control or influence over the company, removing a long-running overhang for the shares.”

Okada Manila will soon launch the final 350 hotel rooms in its Tower B.

“This will give the property its full complement of rooms (around 1,000) to help accelerate mass market revenue growth,” Mr DeCree explained. “Further, Okada Manila has not been impacted by the same VIP headwinds Macau casinos are facing with VIP volume up 30 per centQTD at the property – pointing to a solid 3Q19. The Philippines is one of the fastest growing gaming markets in the world, and when complete, Okada Manila is positioned to be a category killer in the market.”

In terms of pachinko and pachislot machines, Mr. DeCree said: “After several quarters of tepid replacement sales, there is a significant number of units in the existing installed base that are required to be replaced beginning in 3Q19.”