Universal Entertainment Corp might have fired former Chairman Kazuo Okado, but the property that bears his name could prove to be the company’s most valuable asset in its pursuit of a Japan IR license, according to Global Market Advisors Senior Partner and Japan gaming expert Andrew Klebanow.
Brushing aside rumors that Universal is looking to sell Okada Manila – the US$2 billion resort it opened in Manila’s Entertainment City last December – Klebanow instead believes the project represents its best chance of winning a license to operate integrated resorts in Japan.
And the company is much better placed to do so than many suspect, he tells Inside Asian Gaming.
“The Okada Manila project improves Universal’s chances of winning a bid for an IR license,” Mr Klebanow says in a special Okada Manila feature to appear in the upcoming November edition of IAG.
“I do not see Universal off-loading Okada Manila any time soon. This is a flagship project for the company and one that can be used to demonstrate to the IR selection committee that Universal is capable of developing and operating large-scale integrated resorts. That is going to emerge as a very important issue as Japan begins to evaluate development proposals.”
While the recent ousting of its founder, Mr Okada, over fraud allegations remains a stumbling block, Universal’s rapid action in cutting ties could ultimately work in the company’s favor, according to Klebanow.
More importantly, Universal’s Japanese roots and strong track record in the pachinko industry give it a decisive edge over the majority of rival operators to have expressed an interest in operating an integrated resort in Japan.
“Never underestimate the importance of being a Japanese company, particularly one with a long history of gaming in Japan,” Klebanow says. “Having a Japanese partner or being a Japanese company can be a critical success factor in winning a bid for a coveted IR license.
“And with all due respect to Konami, there is not a company out there that has a better understanding of the kinds of electronic games Japanese enjoy playing. With the experience in designing, building, opening and operating an IR, Universal remains in a good position to compete for a license.”
A preview of the Philippines’ 3Q17 results released by Morgan Stanley early Monday morning suggested strong growth at Okada Manila in recent months, with GGR market share likely to have doubled quarter-on-quarter to 13%. The company also predicts Okada Manila will hold between 30 and 32% market share by the end of 2019.
A Special Investigation Committee employed by Universal in September found Mr Okada guilty of committing three acts of fraud, stating that the company’s founder “led and conducted the fraudulent acts” and that he “committed these acts for his own personal benefit … it can only be said that this is an extreme intermingling of private and public affairs and that there was a lack of a sense of ethics that one should naturally have as a director of a listed company.”
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