A Japanese gaming equipment company with previous ties to Nevada has taken its first step toward developing a new manufacturing operation in the state.
The board of directors of Universal Entertainment Corp. on Friday announced that it has agreed to seek loans of up to $25 million to expand its manufacturing capability to North America by building a facility in Nevada.
It’s unclear where in Nevada Universal is seeking to build.
Aruze USA Inc., a wholly owned subsidiary of Universal Entertainment, is loaning the money to a new subsidiary that is exploring expansion in the United States.
The loan agreement reached last week is expected to close Sept. 30 and is effective through the end of 2035.
“The UEC Group conducts its business primarily through the amusement equipment business and the integrated resort business,” the company said in a Friday release.
“However, amid changes in the business environment surrounding its existing businesses, including the downward trend in the domestic amusement equipment market and intensifying competition in the integrated resort business in the Philippines, UEC recognizes that it is important to promptly establish a new revenue base in order to achieve sustainable growth,” it said.
Aruze products
Aruze is behind the Loaded Up Riches, Dragon’s Frame and Moo Moo Cash series of slot machine games.
UEC, headed by Representative Director and President Tomohiro Okada, acknowledged that Nevada is a great location for developing a manufacturing center based on the availability of skilled employees in the field and the state’s prominence in gaming regulation.
“Based on this recognition, as part of its medium- to long-term growth strategy, the UEC Group has decided to develop new businesses that will serve as a ‘third pillar’ in addition to its existing businesses,” a company release said.
“As one such initiative, the UEC Group has decided to pursue re-entry into the business, where it can utilize the technologies, intellectual property, business know-how and other resources related to the development, manufacture and sale of gaming equipment that it has cultivated to date,” it said.
“In the United States, which has a large market scale and particularly in the state of Nevada, gaming license reviews are among the most stringent in the world. If UEC applies directly, suitability reviews of major shareholders, directors, key employees and other relevant persons are expected to require a significant amount of time.”
Second time around
For UEC, a presence in Nevada would be the second time around, after Aruze, in 2023, filed for Chapter 11 bankruptcy protection and abruptly laid off an estimated 100 employees.
During bankruptcy proceedings, Aruze sold its slot operations, including land-based assets and online gaming, to Las Vegas-based slot manufacturer Play Synergy for $7 million, while its table-game assets went to Las Vegas-based Interblock USA for $14 million.
Before Kazuo Okada’s ouster as head of Aruze in 2017, he partnered with former Wynn Resorts Ltd. Chairman and CEO Steve Wynn and was an investor in Wynn Resorts. He unsuccessfully attempted to convince Wynn to invest in Okada Manila in the Philippines before it opened in 2016.
Kazuo Okada, the father of Tomohiro Okada, was ousted from the company’s leadership in a move orchestrated by his son.
Tomohiro Okada convinced members of his family to vote to remove Kazuo Okada from the company after he was accused of misappropriating millions of dollars of company funds. Kazuo Okada denied the allegations.
Daron Dorsey, president and CEO of the Association of Gaming Equipment Manufacturers in Las Vegas, said it isn’t surprising that the company would attempt to set up an operation in Nevada because of its proximity to potential vendors across North America and Nevada’s reputation as a fair but tough gaming regulator.
“I know that the board has made a lot of strides in the last couple of years, both as an agency and with the governor, trying to put a stamp on (its reputation as a gaming regulator),” Dorsey said. “(It wants to be) a very reliable place for a global gaming business or a global gaming supplier to base its operations.”
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
