Japan looks to curb USD200b spent on pachinko gambling

Customers play pachinko machines in a pachinko parlor in Tokyo

As Japan prepares for its first Las Vegas-style casino resorts, the government is considering restrictions on existing gambling establishments, including pachinko parlors and race tracks, in a bid to tackle addiction.

The legalization of casinos in December divided Prime Minister Shinzo Abe’s Buddhist-backed coalition partner Komeito amid concerns about compulsive gambling. Both ruling parties have prepared reports calling for research into dependency and consideration of regulation, including on casinos.

Although the market is shrinking, Japan’s gamblers spent 23.3 trillion yen (USD209 billion) at pachinko parlors in 2015, about four percent of gross domestic product. Betting is also allowed on horse, boat, bicycle and motorcycle racing, but relatively little has been done to combat the associated problems.

Among the ideas to be considered are allowing an individual’s access to pachinko to be restricted on the request of relatives, according to a government document obtained by Bloomberg. Such visit limits are offered by Singapore’s casino regulatory authority. The way the pinball-like machines operate could also be regulated in a bid to make the game less addictive. Pachinko operators may be obliged to take measures to combat addiction, and an independent body could be set up to oversee progress.

Regulations to be considered for other gambling venues include banning credit-card machines that offer instant cash loans from race tracks, according to the document. A panel of government ministers is set to approve the document by the end of the week.

“Companies in any sector prefer to regulate themselves — being bound by legislation is bad for business,” said Kazuaki Sasaki, associate professor in the department of international tourism at Toyo University, when asked about the potential effect on pachinko operators. “Although the increase in costs will hurt the industry in the short term, they’re necessary to ensure its long-term survival.”

One reason why gambling addiction hasn’t been taken seriously in Japan in the past is that pachinko is legally classified as an amusement similar to a fairground attraction, Sasaki said. To avoid any direct breach of the law, winners are offered prizes, which can be exchanged for cash at counters close to the pachinko parlors.

Bloomberg