Industry outlineNevertheless, pachinko has earned itself a separate segment in the representation of Japan's leisure market distribution, ranking second behind the “amusement industry”, which encompasses all other leisure activities from the amusement sector, excluding pachinko. The pachinko industry can be divided into parlor operators and machine manufacturers. Japan’s largest parlor operator in fiscal year 2020 was Maruhan, with approximately 1.5 trillion Japanese yen in net sales. Japan’s leading pachinko and pachi-slot machine manufacturer in fiscal year 2020 was Sega Sammy, with over 100 billion Japanese yen in net sales.
Industry regulationPachinko has an uncomfortable relationship with the law since Japan’s penal code (chapter 23, article 185, 186) prohibits gambling. Unlike the Korean government, which banned pachinko in 2006, the Japanese government has chosen not to ban the game. Instead, the pachinko parlor business, together with game centers and mah-jongg parlors, has been given legal status as an entertainment business, as stipulated by the “Act on Control and Improvement of the Amusement and Entertainment Business”. The act prescribes regulations for such businesses, enabling public safety commissions to issue or revoke parlor operating licenses. The commissions also engage in the nitty-gritty of the pachinko business, stipulating various details of gameplay such as the probability of hitting a jackpot, the playing environment, which includes specifications regarding the lighting, or the amount of admissible noise in the parlor. As pachinko developed into a driving force of the Japanese leisure business, creating job opportunities, and contributing with a handsome amount of taxes over the years, there has been little financial incentive for decision-makers to upheave the status quo.
Social aspects and possible future competitionWhile the pachinko industry enjoys substantial financial success, parlor operators and the government have done relatively little to address the negative social impact of the industry, gambling addiction. In a 2019 survey on the habits of pachinko players, most respondents stated that they visit a pachinko parlor more than once a week, while the majority of players spend on average over 10,000 Japanese yen per parlor visit . Despite these dangers to society, dealing with human casualties was entrusted to NGO’s and volunteer groups.
Pachinko remains a popular leisure time activity for many Japanese people. However, the industry may be experiencing some stiff competition in the near future. In recent years, the government has agreed on legalizing casinos, which were previously non-existent in Japan. Soon Japan will have its first casinos, or rather, vast gambling establishments dubbed integrated resorts. The bidding for contracts by leading private gambling companies was in full-swing pre-COVID-19 and negotiations continue despite the pandemic.