It is the familiar background music of every Japanese shopping street: a cacophony of mechanical bleeps and rattles, disgorged along with a plume of cigarette smoke each time the doors of a pachinko parlor open to admit a new punter. Yet the archetypical salary man pastime is dying, in spite of its apparent ubiquity. Even as Japan looks ahead to its first western- style casinos, pachinko, the modified version of pinball played since the 1930s - itself a quasi-legal form of gambling - has been all but abandoned by younger Japanese.
New data from a Japanese research group shows that the number of players has fallen by a full two-thirds over the past 20 years, to 11m in 2013. Just one in six men in their 20s now plays, down from half in 1995. For men under 20, the number is just one in 50.
The decline of pachinko - once so popular that a hit song from the mid-1990s exhorted addicts, “Get back to work! Your wife and kids are crying!” - has been mirrored in Japan’s other legal forms of gambling. Income at horse, boat and bicycle racing venues has also fallen steadily for the past two decades.
“Many smaller pachinko operators are simply giving up,” says Takashi Kiso, a leisure sector analyst who advises investors about new opportunities in casino gaming - an industry that does not exist in Japan but may soon. A bill to legalize casinos is before parliament and has wide support, including from Shinzo Abe, prime minister. It is unclear whether Japanese are tired of their old gambling pastimes or of gambling in general. CLSA, a brokerage, estimates that a dozen or so casinos could generate $40bn in revenues a year, leaving Japan only about $10bn shy of Macau, the world’s largest casino-gaming market.
The decline of pachinko - once so popular that a hit song from the mid-1990s exhorted addicts, “Get back to work! Your wife and kids are crying!” - has been mirrored in Japan’s other legal forms of gambling. Income at horse, boat and bicycle racing venues has also fallen steadily for the past two decades.
“Many smaller pachinko operators are simply giving up,” says Takashi Kiso, a leisure sector analyst who advises investors about new opportunities in casino gaming - an industry that does not exist in Japan but may soon. A bill to legalize casinos is before parliament and has wide support, including from Shinzo Abe, prime minister. It is unclear whether Japanese are tired of their old gambling pastimes or of gambling in general. CLSA, a brokerage, estimates that a dozen or so casinos could generate $40bn in revenues a year, leaving Japan only about $10bn shy of Macau, the world’s largest casino-gaming market.
But much of that revenue is seen coming from Chinese tourists. Pachinko’s image is outdated. Parlors have tried to attract young people and women - another group not keen on the game - by installing non-smoking rooms and plastering machines with images of pop singers and cartoon superheroes.
Yet nothing has stopped the decline in numbers. Today’s youth have less disposable income than their parents did, and would rather spend what they have on games for their mobile phones. Pachinko’s eclipse explains why larger companies in the industry are turning elsewhere. Sega-Samy holdings, a maker of pachinko machines, last year bought a struggling seaside resort where it hopes eventually to build a casino, and has partnered with South Korea’s Paradise group on a planned $1.7bn casino near Seoul.
Yet nothing has stopped the decline in numbers. Today’s youth have less disposable income than their parents did, and would rather spend what they have on games for their mobile phones. Pachinko’s eclipse explains why larger companies in the industry are turning elsewhere. Sega-Samy holdings, a maker of pachinko machines, last year bought a struggling seaside resort where it hopes eventually to build a casino, and has partnered with South Korea’s Paradise group on a planned $1.7bn casino near Seoul.
Kazuo Okada, the Japanese casino investor involved in an ugly fight with Steve Wynn’s Las Vegas-based Wynn Resorts, also started out in the pachinko-machine business.
Pachinko operators are meanwhile milking more money from their remaining customers, who surveys show spend an average of more than Y10,000 each time they play. Industry revenues have fallen by 40 per cent over the two-decade period tracked by the Japan Productivity Centre, less than the 60-plus-per cent drop in the number of players.
Those who still play longer and more often, a change that may reflect the game’s growing reliance on time-rich retirees. New slot-machine-like features added to machines in recent years have also made the game more addictive, critics say. Some operators hope to clarify the game’s legal status to improve its image.
Pachinko operators are meanwhile milking more money from their remaining customers, who surveys show spend an average of more than Y10,000 each time they play. Industry revenues have fallen by 40 per cent over the two-decade period tracked by the Japan Productivity Centre, less than the 60-plus-per cent drop in the number of players.
Those who still play longer and more often, a change that may reflect the game’s growing reliance on time-rich retirees. New slot-machine-like features added to machines in recent years have also made the game more addictive, critics say. Some operators hope to clarify the game’s legal status to improve its image.
Pachinko players buy baskets full of metal balls to feed into the machines and, if they play well, are rewarded with more balls in return. That part is legal - but then winners exchange their balls for cash, in a complicated multi-stage transaction that often ends in an alleyway behind the parlour.
That part runs against antigambling laws, though the violation is universally ignored by police. Retired officers are often hired as “consultants” to parlour operators, an arrangement that helps deaden the incentive to crack down.
Now, some pachinko groups are arguing that the looming acceptance of casinos means their industry should be brought out of the shadows too, gambling element included. Lawmakers who support them have formed a new cross-party group to promote the idea - a development that has worried some in the casino lobby, who think it could increase public opposition to the pro-casino bill. “It’s hard to argue with their case,” says Takeshi Iwaya, a legislator from the ruling Liberal Democratic party who is sponsoring the casino bill, “but we’re urging them to be patient before pressing it.”
(written by Jonathan Soble for Financial Times)
That part runs against antigambling laws, though the violation is universally ignored by police. Retired officers are often hired as “consultants” to parlour operators, an arrangement that helps deaden the incentive to crack down.
Now, some pachinko groups are arguing that the looming acceptance of casinos means their industry should be brought out of the shadows too, gambling element included. Lawmakers who support them have formed a new cross-party group to promote the idea - a development that has worried some in the casino lobby, who think it could increase public opposition to the pro-casino bill. “It’s hard to argue with their case,” says Takeshi Iwaya, a legislator from the ruling Liberal Democratic party who is sponsoring the casino bill, “but we’re urging them to be patient before pressing it.”
(written by Jonathan Soble for Financial Times)
