Japanese Pachinko Sector Nervous about New Gambling Addiction Bill

Blurred image of people playing pachinko

While the pachinko sector in Japan sees revenues of more than £1.4bn ($1.84bn) each year, there are widespread concerns about the recent gambling addiction bill that was passed. This new bill means that pachinko games will have lower pay-outs, which will be a major disincentive to many players.

Effects on pachinko sector

While pachinko is massively popular in the country, a lot of the businesses centered on the game are starting to decline. Along with the added restrictions that came about in 2018, the industry is getting ready for matters to become even worse as time goes on.

While the gambling addiction bill will help problem gamblers in the country, a problem that has become increasingly frequent in recent years, there will, of course, be knock-on effects for those involved in the sector.

The bill only came about as a form of compromise to help win approval of the 2016 bill that legalized casinos in Japan. The legalization of casinos was a hotly debated topic for decades and there were a lot of people who opposed the bill. In July, casino resorts were also, but this came in alongside the gambling addiction bill.

The bill calls for lower pachinko payouts. Therefore, players will win and lose their money much more slowly. This may suck out a lot of the addictive and exciting nature of the game that has clearly attracted millions of people to play it daily.

The pachinko establishments have three years in which to comply with the new rules. However, a large number of the machines will have to be replaced, and this cost is an obvious concern to the owners, along with their fears that the new types of games will be boring.

Many owners argue that the casino legalization bill was approved mainly to improve finances for provinces, but the gambling addiction bill will put a heavy strain on the pachinko industry.

The sector as a whole has been shrinking steadily over the past decade. Total revenues are now around £1.4bn ($1.84bn) annually; they were closer to £2.1bn ($2.76bn) ten years ago. It has been a popular game since the end of the Second World War but, with Japan’s decreasing population, participant numbers have been steadily declining.

As a result, almost 8,000 parlors have been forced to shut their doors over the last 20 years. The number of parlors reached a high of 17,000 20 years ago but is now down to about 9,600.

There is also an increased incidence of pachinko operators being forced into bankruptcy, with 29 such cases in 2017, up from a dozen cases the previous year. With these new changes, it is almost inevitable that this figure is going to rise significantly in the coming years. Forecasts estimate that total revenues across the country will drop by about 20%.

Indifference by many

While the owners of these pachinko establishments are, of course, not happy with these changes, but not many people are overly sympathetic about their plight.

Many of the parlors are owned by Korean minorities, who traditionally have dealt with issues of discrimination across the board in various industries.

There clearly is a growing problem with gambling addiction and people in Japan want it to be resolved. This bill is a step in the right direction. A survey conducted by the government in 2017 showed that 3.6% of Japanese adults faced gambling addiction at one time or another, which is significantly higher than the 1-2% average in most developed nations.

With pachinko establishments being the number one place for gambling in the country, it is a logical conclusion that a large portion of the problem lies there.

As major lobbying powers will benefit as a result of the changes, there has not been much resistance from the lobbying sector. The manufacturers of the pachinko machines will benefit in the short run because a lot of parlors will have to purchase newer machines to comply with the updated regulations. Some operators are considering a move into the casino business.

There are even those who think the popularity of pachinko might be reignited by dialing down the gambling element of the gameplay experience.

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