Universal Entertainment plans to stage its return to the overseas slot-machine market through UDN Gaming, a Nevada company wholly owned by Universal President Tomohiro Okada.
The structure is intended to support an earlier business launch while the Japanese group pursues its own US gaming licenses, according to a September 11th filing.
UDN will initially apply for the required licenses and develop, manufacture and sell gaming equipment, including slot machines. Universal said it also intends to apply for US gaming licenses in due course.
The group said a direct application would require suitability reviews covering major shareholders, directors, key employees and other relevant parties, which could take considerable time.
Established in Nevada on March 13th with capital of $1, UDN is wholly owned by Okada, who also serves as one of its directors.
Universal will provide the company with financing, gaming equipment intellectual property and operational support during the launch phase.
The Japanese group said it wants the overseas gaming equipment business to become a ‘third pillar’ alongside its domestic amusement equipment operations and the integrated resort business centered on Okada Manila.
Universal cited the declining domestic amusement equipment market and intensifying competition in the Philippine integrated resort sector as reasons for establishing another revenue base.
Under agreements scheduled to be executed on September 30th, Universal subsidiary Aruze USA will provide UDN with a credit facility of up to $25 million. The facility carries an annual interest rate of 5.12 percent and runs until December 31st, 2035.
UDN will draw down the funds in stages according to its financing requirements. All shares held by Okada will serve as collateral for the facility.
The agreement also allows Aruze USA to require Okada to transfer all UDN shares to Universal or a designated third party at the original subscription price.
Universal will license its gaming equipment intellectual property to UDN for $100 per unit shipped. Engineering, accounting and administrative support will be charged at direct cost plus a 6 percent markup.
Universal currently holds no voting rights in UDN. However, the group said UDN would become a consolidated subsidiary under applicable accounting standards because Universal will provide all of its financing and license its core gaming equipment intellectual property to the company.
The timing of the consolidation has not been determined. Universal may later acquire UDN’s voting rights and make it a wholly owned subsidiary, depending on the progress and outcome of its own US licensing applications.
Because the arrangements constitute related-party transactions, Okada did not participate in the Universal board’s deliberations or vote. The remaining eight directors unanimously approved the agreements, while the Audit and Supervisory Committee also granted its approval.
Universal expects the arrangements to have an immaterial impact on its consolidated financial results for 2026.
