Universal Entertainment Forms Nevada Gaming Unit

Universal Entertainment Corp has formed a Nevada company to pursue US gaming licenses. Its board approved agreements with UDN Gaming Inc on September 11. UDN is a Las Vegas company wholly owned by Universal's president, Tomohiro Okada. It was incorporated in Nevada in March with just $1 in capital. UDN will develop, manufacture, and sell gaming equipment, including slot machines. Universal plans to later acquire UDN, pending its own US license applications. The move marks Universal's return to the overseas gaming equipment business.

UDN Gaming's Setup, Valuation and Licensing Deal

UDN Gaming Inc. was established in Nevada on March 13. Filing records describe its purpose as the "development, manufacture, and sale of gaming equipment including slot machines overseas." Universal currently holds no voting rights in UDN. Instead, it is financed through a credit facility from Universal subsidiary Aruze USA Inc.

UDN is valued at up to $25 million, with the deal set to close on September 30. Universal will also license its gaming equipment intellectual property to the facility, charging $100 per unit shipped.

According to Universal, Nevada's gaming license reviews are among the most stringent globally.

Using UDN allows the group to begin operations sooner.

Related-Party Deal Approval and Okada's Role

Because Okada owns UDN outright, the arrangements are classified as related-party transactions. Okada did not take part in Universal's board deliberations and did not vote on the agreements. The remaining eight directors unanimously approved the deal. Universal's Audit and Supervisory Committee also granted its approval.

The company expects the deal to have an immaterial impact on 2026 results. Okada is also the controlling shareholder of Universal's parent, Okada Holdings Ltd. Universal intends to eventually include UDN in its consolidated accounts, though the timing has not been determined. It also plans to submit its own US gaming license applications in the coming months. Direct applications require suitability reviews covering shareholders, directors, and key employees.

Losses, Strategy, and a Past Gaming Venture

The Nevada move comes as Universal seeks new revenue beyond its core businesses. Universal reported a net loss of JPY231.4 billion, about $1.51 billion, for 2025. That loss widened sharply from JPY15.6 billion a year earlier. Impairment charges at Okada Manila, the group's Philippine resort, drove most of the increase. Universal cited a declining pachinko market and rising competition in the Philippines.

The group wants gaming equipment sales to become a third revenue pillar. Universal has history here through Aruze Gaming America Inc., founded by Kazuo Okada. That earlier venture supplied slot machines worldwide but was never a Universal subsidiary. The relationship eventually broke down into litigation over alleged patent misuse.