Pachinko and pachinko slot machines, once known as the kings of entertainment for the general public in Japan, have started to show signs of decline amid tightened regulations on gambling. While the overall number of pachinko addicts may have declined as a result, figures show other unexpected problems have started to emerge.

A white paper on leisure complied by the Japan Productivity Center for Socioeconomic Development showed that in 2006, Japan's pachinko-playing population stood at 16.6 million people, a drop of 11 million people compared to 10 years earlier.

Profits have also fallen. In 1995, the gross turnover for the pachinko industry reached 31 trillion yen, but in 2006 the figure shrank to 27 trillion yen.

This has hit many pachinko parlors hard, with 144 pachinko parlor operators going bust in 2007, 40 percent more than during the previous year. It was the worst figure for bankruptcies in the past decade.

Nobuo Tomoda, head of the information management department at credit research firm Tokyo Shoko Research, suggests pachinko parlors' focus on gambling is behind the bankruptcies.

"It's probably because the gambling factor is too high, and pachinko parlors no longer remain places for regular salarymen to enjoy light entertainment," he said.

Since the 1980s, pachinko parlors have increasingly brought in machines focused on gambling.

"When the payout in each case was bigger, pachinko fanatics who dreamed of a jackpot would feed large amounts of money into the machines, which boosted sales," explains an executive from a pachinko parlor operator.

In the early 2000s, a pachinko slot machine titled "Million God," which was said to offer wins as big as 1 million yen per day, was developed, and customers flocked to parlors that had the machine.

However, side effects have emerged alongside the big jackpots. Firstly, novices have become more self-conscious about visiting pachinko stores, thereby reducing the overall population of pachinko players. But the serious problem of pachinko addictions and players with large debts remains. Across Japan, there has been a spate of problems caused by pachinko addictions, including cases in which pachinko-playing parents left their babies in cars in summer while they played pachinko, causing the infants to die from heat exhaustion.

The problems associated with pachinko prompted the National Police Agency to tighten regulations and by September 2007, most of the pachinko machines that focused largely on gambling were cleared out. The Financial Services Agency also introduced restrictions, banning the placement of unmanned loan-dispensing machines near pachinko parlors.

Now only machines that are "barely able to make 20,000 to 30,000 yen a day" (according to a major pachinko parlor executive) are permitted. As a result, the pachinko fanatics that parlors had relied on for income have dropped off, and the industry is complaining of worsened business performance as a result.

This financial damage has spread to other areas. Most pachinko machines today have liquid crystal displays and a plethora of other electronic parts. Special businesses assemble the machines, but the electrical parts are produced by prominent electronics manufacturers. Omron Corp. a major manufacturer of precision instruments suffered lower-than-expected sales and business profits in its midterm financial results in September 2007. One of the reasons was reportedly a drop in demand for its sensors to detect pachinko balls.

There are a significant number of financial organizations that provide big loans to pachinko parlors, which to date have been seen as cash cows, but some bank executives are starting to show caution with one saying they are now a "new source of bad debts."

Copyright 2005-2006 THE MAINICHI NEWSPAPERS. All rights reserved. Mainichi features the best news in Japan, current news in Japan, Japan news in English, Japan business news, Tokyo Japan news, and Japan entertainment news. Mainichi News is syndicated in accordance with editorial regulations: personal and noncommercial purposes.

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