Can pachinko survive Japan’s tough new gaming laws?

  • Pinball-style game currently avoids gambling regulation
  • Many of Japan’s 3.2 million gambling addicts play Pachinko

Classic Japanese gambling slot game pachinko has been thrust into the spotlight as the country heads towards a new future with legal casino gambling – and the threat of tough regulations could shut the game down entirely.

pachinko japan
Pachinko machines in Japan

The popular game is currently available at 11,000 nationwide outlets and has millions of players, but interest in the arcade game may fall when high stakes gaming at casino tables is finally legalized throughout the nation.

Pachinko is currently allowed thanks to loopholes in Japan’s laws, which allow operators of the pinball-like game to exchange prizes for sale, rather than paying cash.

However, Pachinko faces the threat of competition from new integrated resort casinos – and if it wants to challenge its rivals for space in the market, it needs to expose itself as a gambling activity.

Pachinko is worth around $200 billion so it’s a pie that casinos would like a hearty slice of.

How to play Pachinko

Pachinko is a pinball style game where players launch a ball bearing into the machine, and wait to see where it lands. The ball might fall through one of the prize holes, awarding a payout of extra balls, or it might be lost to the machine. There is some skill involved, but the games are mostly based on luck.

Players pay for the balls they use in the game, and they can ‘cash in’ their remaining balls at the end of the session. This gets a little complicated, because gambling transactions are illegal. Players exchange their Pachinko balls for token prizes, such as lighters and keyrings, and leave the Pachinko parlour.

Nearby will be a store which ‘buys’ the prizes back for cash – and this is how a player gets their hands on their winnings.

Gambling loophole brings Pachinko industry into question

The law in Japan prohibits most forms of gambling, though this is subject to change with casino gambling officially legalized in December 2016.

Integrated resort casinos are expected to appear from around 2023, when licenses have been finalized and plans are approved.

When the casinos open, with their associated roulette, blackjack and poker tables, pachinko parlours will finally face competition in the gaming market.

Though Japanese residents have not officially had access to gambling yet, there are an estimated 3.2 million gambling addicts in the country. Some of these play through illegal online casinos, travel to place bets or make use of proxy betting services, but many of those addicts participate in pachinko games.

The Government hopes to regulate the game under gambling laws – but the Pachinko industry maintains that it is not a gambling game.

From February, the maximum payout on a pachinko game will be cut to one third. Operators had hoped to combat this by raising the maximum cost of each pachinko ball.

Yet if the industry invokes its right to fair competition against the casino giants, pachinko will have to expose itself as a gambling game – and face even tougher restrictions.

For now, pachinko parlours will have to wait and see. No casino licenses have been issued at this stage and there are no confirmed plans to open venues before 2023, so Pachinko has several years to establish its direction and prepare for change.

Once the casino rivals enter the market, the landscape of Japanese gambling will be altered forever – and regulations and laws will need to adapt as this new industry develops and evolves.

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