S&P Global Ratings announced on Tuesday that it has downgraded Japan’s Universal Entertainment Corp from B to B-. The agency cited that Universal’s EBITDA has fallen “significantly below expectations” because of the continued weak performance of its casino resort business in the Philippines.
Universal’s subsidiary, Tiger Resort Leisure & Entertainment Inc (TRLEI), operates Okada Manila, a major integrated resort in Manila’s Entertainment City. According to S&P, TRLEI has recorded double-digit year-on-year declines “for consecutive years.” The rating agency linked this slump to the slow recovery of the VIP segment, fewer international tourists from China and other regions, and rising competition. As a result, operating profit has slipped back into negative territory.
Entertainment City currently has three casino resorts—Okada Manila, Studio City Manila, and Solaire—while a fourth property, Westside City Resorts World, is set to open in 2026. Beyond these major resorts, Metro Manila also hosts around 20 smaller gaming venues, adding further pressure to the competitive landscape.
Universal ‘stable’ heading into 2026
Despite the rating downgrade, S&P has assigned a stable outlook to Universal Entertainment, which also produces and sells pachislot and pachinko machines. According to the agency, “the likelihood of a significant deterioration in liquidity is low for now,” adding that the company’s cash flow and core business performance are expected to stabilize.
S&P projects Universal’s company-wide EBITDA to decline from JPY21.2 billion in 2024 to around JPY18 billion in 2025, before improving to JPY24 billion–JPY25 billion in 2026.
The agency noted that Universal’s Japanese gaming machine division “has recovered to some extent,” but warned that sales remain difficult to forecast due to slow progress in compliance testing for new models. The company’s 2024 results were hit hard after several new machines failed to pass these tests. Universal is now expected to improve unit sales and profitability by introducing new models and re-releasing past successful titles.
Although Universal continues to carry a heavy debt burden, S&P believes the company can manage it for the time being. However, it cautioned that another downgrade could occur if EBITDA weakens further or if cash reserves fall below JPY25 billion.
