Universal Hit as Okada Manila Drags Earnings Down

S&P Global Ratings has turned up the pressure on Universal Entertainment after cutting the company’s credit score from ‘B’ to ‘B-’, pointing directly to the faltering performance of Okada Manila as the reason for the downgrade. While the agency kept a stable outlook attached to the rating, the message is unmistakable: the difficulties at the Philippines’ flagship casino resort are pulling the parent group into increasingly strained financial territory.

According to S&P, Universal Entertainment’s earnings have slipped far below expectations. The casino arm in the Philippines has become the weakest link, overshadowing the group’s long-established pachinko and pachislot manufacturing business in Japan. Although S&P believes the company’s liquidity will hold steady in the immediate term, the current direction of travel is negative and the casino’s performance is the core issue.

Headline Figures That Don’t Tell the Whole Story

Okada Manila reported a 2% increase in EBITDA in Q3 2025, which would normally be a good sign. But underneath that, the resort’s gross gaming revenue plunged 15.3% year-on-year, revealing a significant decline in actual gaming activity. S&P’s interpretation is clear: operational efficiencies may be keeping EBITDA afloat temporarily, but weakening gaming revenue is a structural concern.

Universal Entertainment now expects to post a loss of roughly ¥14 billion (US$90 million) for the full year ending December 31. The plunge in VIP turnover, a major revenue driver for Okada Manila, has compounded the financial strain. At the same time, delays in the rollout of new gaming machines for Japan’s pachinko and amusement sectors are weighing on the broader business. S&P estimates total EBITDA will sink to around ¥18 billion in 2025, down from ¥21.2 billion in 2024, which was already a year marked by noticeable deterioration.

A Competitive Storm in Manila

The resort’s setback is not purely internal. S&P highlighted the intensifying competition across the Philippine casino market, where operators are fighting over a smaller pool of high-spending tourists. With VIP visitation from China and other key source markets still well below pre-pandemic levels, Okada Manila’s operating profit has tipped back into negative territory.

The rating agency doesn’t see this trend reversing soon. It expects double-digit declines in gross gaming revenue to continue for consecutive years, delaying any meaningful recovery in the Philippine casino segment.

Trying to Spend Its Way Back

S&P’s assessment suggests that Universal Entertainment will need to invest more heavily in marketing to revive visitor traffic. Even though customer numbers may eventually rebound, profitability is expected to deteriorate before any improvement becomes visible, as marketing and promotional costs rise sharply.

The agency predicts the casino resort’s EBITDA will fall to around ¥12 billion in FY2025, with a gradual recovery to ¥15–16 billion the following year—still far below the ¥19 billion generated in 2024. The gap underscores how much ground Okada Manila has lost and how difficult the climb back may be.