Tighter pachinko regulation in Japan and growing costs at the Okada Manila casino weighed heavily on Japanese gambling operator Universal Entertainment Corp. in 2017.
In a disclosure to the Tokyo Stock Exchange on Wednesday, Universal announced that it incurred a JPY13.4 billion (US$125.8 million) net loss for the nine months ending on December 31, 2017 on net revenue of ¥68.55 billion ($643 million).
Universal explained that the net loss was a result of tighter regulations in Japan, particularly on pachinko parlors, as well as the ballooning costs of Okada Manila’s construction delays and the ongoing litigation against Wynn Resorts.
The company reported that its Pachislot and Pachinko business posted net sales of JPY50.35 billion ($472.7 million) for the April-December 2017 period, with operating profit of JPY9.34 billion ($87.7 million).
“In February 2018, the industry will enter a period of significant changes due to the enactment of revised rules. As a result, there is very little activity in the industry due to uncertainty about the outlook for the Pachinko and Pachislot markets and a reluctance of hall operators to purchase new titles,” Universal said.
Universal’s Okada Manila, on the other hand, posted net sales of nearly JPY16.05 billion ($150.5 million) and an operating loss of JPY9.02 billion for the period.
Unlike pachinko, Universal has expressed optimism that the full scale operations of Okada Manila’s VIP casino will make a big contribution to sales.
The consolidated statement of income for FY 2017 only covers the months of April to December after the shareholders approved an amendment to the firm’s Articles of Incorporation that changed the end of the fiscal year from March 31 to December 31.
The purpose of this change was to facilitate comparisons of financial data with the performance of companies in other countries and to increase the transparency of Universal Entertainment Corporation, according to the company.