Topic summary
Pachinko
Pachinko (Japanese: ; pronounced) is a mechanical game originating in Japan that is used as an arcade game and, muchmore frequently, for gambling. Pachinko fills a niche in Japanese gambling comparable to that of the slot machine in the Western world as a form of low-stakes, low-strategy gambling.
Pachinko parlors are widespread in Japan, and usually also feature a number of slot machines (called pachislo or pachislots); these venues look and operate similarly to casinos. Modern pachinko machines have both mechanical and electrical components.
Gambling for cash is illegal de jure inJapan, but the widespread popularity of low-stakes pachinko in Japanese society has enabled a specific legal loophole allowing it to exist. Pachinko balls won from games cannot be exchanged directly for money in the parlor, nor can they be removed from the premises or exchanged with other parlors. However, they can be legally traded to the parlor for so-called "special prize" tokens (), which can in turn be "sold" forcash to a separate vendor off-premises. These vendors (ostensibly independent from, but often owned by, the parlor owner) then sell the tokens back to the parlor at the same price paid for them—plus a small commission, creating a cash profit—without technically violating the law.
By 1994, the pachinko market in Japan was valued at ¥30trillion (nearly US$300billion; equivalentto $570 billion in2024). In1999, salesand revenue from pachinko parlors contributed 5.6% of Japan's ¥500 trillion GDP, and they employed over 330,000 people, 0.52% of all those employed inJapan. However, the sales amount of these pachinko parlors is calculated based on the total amount that customers rented pachinko balls from pachinko parlors. It is said that on average, about85% of the money spent by customers in pachinko parlors is returned to the customers, so the sales of pachinko parlors are said to be about15% of the statistical amount. In 2015, Japan's pachinko market generated more gambling revenue than that of Macau, Las Vegas, and Singapore combined. Pachinko gambling's grey-market nature and tremendous profit historically resulted in considerable infiltration by yakuza, who used it as a vehicle for money laundering and racketeering.
Since the 1990s, however, this has been less of an issue due to police crackdowns. There were over 7million pachinkos around the world in2018 with morethan half of them being inJapan. In recent years, the pachinko market (the total amount of pachinko balls rented by customers from pachinko parlors) and the number of pachinko parlors inJapan have both continued to decline. The marketsize in2022 was ¥14.6trillion, lessthan half of the ¥35trillion in2005 when the market was at itspeak, and the numberof pachinko parlors in2022 was 7,665, lessthan half of the 18,244 in1997, when the numberof parlors was at its peak.
Following a number of years of decline of parlours and machines, the number of pachinko machines inJapan dropped to around 2.5million by the end of 2019.