Japan: market size of pachinko and pachi-slot 2021

In 2021, the pachinko and pachi-slot market size in Japan amounted to 14.6 trillion Japanese yen. While the size of the industry continuously decreased during the past decade, pachinko still comprised a substantial share of Japan’s leisure industry. Pachinko has a player population in the millions, thousands of parlors, and millions of machines operating throughout the country.

How does pachinko work?

Pachinko is an arcade-style gambling game in which small metallic balls fall through a field of obstacles. The objective is to direct balls into winning cups, which then triggers the machine to gush out more balls. These can be later turned into cash or prizes at nearby shops. The gameplay goes as follows: the player feeds the machine cash to rent out balls. Players have a limited amount of control over the flow of the game by utilizing levers to inject balls into the circuit or to manipulate traps inside the machine. One small silver ball can be bought from somewhere between 1 to 20 Japanese yen, depending on the machine. Most pachinko gamblers spend over 10,000 Japanese yen per parlor visit, making the pachinko business lucrative, as the amount won per pachinko machine per day shows.

Is playing pachinko legal in Japan?

The short answer is not quite. According to chapter 23 article 185 of Japan’s criminal code, gambling is prohibited by law, as the first part of the unofficial English translation states: “A person who gambles shall be punished by a fine of not more than 500,000 yen or a petty fine; […]”. Despite this, Japan’s gambling industry seems to be thriving. Millions of people indulge in different variants of lotto, sports betting (mainly horse racing, motorboat racing, and bicycle racing), and pachinko or pachi-slot gaming, to name the most prominent contributors to the industry’s market size. In terms of the amusement industry market share, pachinko has a dominant position, followed by horse racing (keiba). The market share and market size numbers offer the means to solve this paradox that is occurring in Japan’s amusement industry. With the pachinko market size worth 20 trillion Japanese yen, it is evident that the stakes are high and the stakeholders numerous. In 2019, pachinko parlor operators paid a total of 90 billion Japanese yen in taxes. Consequently, legal exceptions to the above-mentioned prohibition were created in the past, and various loopholes were devised to make the impossible possible so that gambling can go on. Hence, the continuation of the aforementioned paragraph reads: “[…]; provided, however, that the same shall not apply to a person who bets a thing which is provided for momentary entertainment”. Through the agency of local police, the Japanese government has a tight grip on the industry. The government in cooperation with public safety commissions, control the industry’s business environment, and also engage in the nitty-gritty of the pachinko business, devising and enforcing machine standards, among other things.