The $200 billion slot machine spend that Japan wants to crack down on

  • Government action follows legalization of casinos in December
  • Japanese players spend $209 billion annually on pachinko machines

Weeks after the legalization of casinos in Japan, the government of Prime Minister Shinzo Abe is considering apparently contradictory moves to restrict existing slot machine wagering in the country.

The Japanese love of Pachinko is such that it amounts for 4% of the nation's entire GDP
The Japanese love of pachinko is such that it amounted to 4% of the nation’s entire GDP in 2015

The Japanese love playing pachinko, a type of pinball and slot machine hybrid that sees $209 billion wagered annually.

December’s legalization proved controversial, even within the coalition government, and the political upheaval has prompted reports from both governing parties that call for more research into problem gambling and possible extensive regulation.

Though it is shrinking, the Japanese gambling market remains significant, not least in respect of the amount wagered at pachinko parlors which amounts to a massive four percent of Japan’s GDP. Betting on horse racing, boat, and motorcycle racing is also legal, but there have been no serious attempts by the authorities to address problem gambling.

In the case of pachinko, this lack of government action has been partly due to its status as an amusement, comparable to a fairground attraction, rather than gambling. Pachinko players win prizes rather than money, though the prizes can be exchanged for cash elsewhere.

Self regulate to survive

A number of ideas have been put forward by the government, including the possibility of restricting an individual’s use of pachinko machines at the request of his family, as currently happens in Singapore. Other proposals include changing the pachinko machines to make them less attractive to problem gamblers and requiring pachinko companies to take steps to fight addiction.

Government ministers are likely to approve the proposals within the next few days, but it is likely that pachinko operators will adopt many of the measures voluntarily, in the hope that by being seen to self-regulate, they will avoid more stringent legislation in the future that might threaten the survival of the pachinko and the wider industry.

OUR VERDICT

It never ceases to amaze just how big the pachinko market is in Japan. $200 billion is astonishing when you consider the US casino trade body, the American Gaming Association, puts the value of the US casino industry at $240 billion.

No wonder the legalization of casinos in Japan has caused such a stir among potential investors, when the population is already so used to wagering big money.


The government has been hard pressed to stress that it will regulate heavily any casinos that do launch in the Asian island nation, so it is perhaps not a surprise that there are now moves to regulate what it has already got.

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