Pachinko: How Japan’s Pinball Gambling Industry Makes 30 Times More Money than Las Vegas Casinos

1 out of 11 Japanese people play pachinko, a vertical pinball-like slot machine, at least once a week, spending over £152 billion annually. That’s 30 times more money than all casinos in Las Vegas generate and more than the GDP of New Zealand.

How Pachinko Works

Inside the more than 10,600 pachinko parlours found across Japan, you can find rows upon rows of colourful, flashing pachinko slot machines lined up alongside one another. The goal of the game is to drop as many silver ball bearings as you can into a scoring hole in the middle of the playing area. Players can control the way the balls shoot into the machine by turning a single wheel. The silver balls will then bounce their way down from pin to pin towards the target.

Pachinko is often considered as an amusement because of the skills required. Unlike traditional (online) slot machines, which are mostly about a lucky pull of the lever, pachinko requires skills and techniques in twisting the wheel to aim and control the shots. Players with skilled techniques and accurate aim will win the game. This explains why Pachinko slot machines are modified by gambling operators from time to time to prevent players from becoming too skilled at repeating the same pattern.

Despite the game’s popularity, pachinko parlours are only considered semi-legal. Most gambling activities are prohibited in Japan, with the exceptions of horse racing and certain types of motorsports. Pachinko parlours manage to survive without breaking the law by using a loophole. This explains why there is an intermediary between the winning of the balls and its conversion into cash form.

Each winning ball carries an equivalent number of points that allow the player to redeem for a prize at the parlour counter, ranging from pencils and soap bars to Chanel handbags and bicycles. If the player wishes to convert the prize into an equivalent amount of cash, they will have to do it away from the parlour.

The cash conversion used to be controlled by the Yakuza, a mafia organisation in Japan. However, in many pachinko parlours today, the cash exchange is made possible simply by building a glass wall between the prize counter and the cashier.

Korean Japanese: The Pachinko Operators

Japanese people spend half of their leisure time in pachinko parlours. The industry has more employees than Japan’s top 10 car manufacturers. For example, Dynam, a leading operator of pachinko parlours, owns over 400 halls in Japan.

Pachinko parlours are however mostly owned by Korean Japanese people. They took the lead to bring the game back into Japan during the post Second World War period. Hundreds of thousands of Korean people worked or were forced into labour in Japan during colonial rule. When the war ended, they suffered from isolating discrimination and hence a lack of employment opportunities. It was difficult for Korean people to land on jobs anywhere else so pachinko parlours became a place of employment. Korean men then started working in pachinko parlours, while women ended up working in Korean restaurants.

The Challenges

Although the revenues of pachinko are impressive, the number of pachinko parlours in Japan has dropped by approximately 30% over the past 10 years.

As the parlours are working to attract younger players, new laws have been put in force to reduce gambling addiction. The maximum payout per machine is cut by 33%, meaning a player can win no more than £347 in a four-hour section.

Casinos, which were legalised in the country a few years back, are also becoming a fierce competitor of pachinko parlours. It won’t be surprising when more and more operators introduce the popular game into their casinos, trying to get their own slice of the market. Thanks to the Japanese government’s effort in preventing problem gambling, Japanese residents will only be allowed to visit the casinos 3 times a week and will have to pay an entry fee every time they visit, it is still expected that the casinos are going to make billions of profit.

Nevertheless, habits are often hard to break. To seasoned Japanese players, Pachinko is an incredible pastime and an indispensable part of their lives. 1.5 million brand new pachinko machines are still sold to parlours every year, proving the game’s stable demand and unbeatable popularity.

The History of Pachinko

Originating from the 1920s, pachinko machines were first invented in Chicago as a children’s toy called the “Corinth Game” or "Corinthian Bagatelle", based on the table game "Bagatelle". The game was first imported into Japan in 1924, and it did not take long for it to be found at almost every candy store. Children were awarded sweets or fruits if they managed to score a certain score. The game was called “Pachi-Pachi” among children due to the clicking sounds made while playing the game.

Back in 1910, British wall game “The Circle of Pleasure” was created and distributed. A number of features of the innovative machine were later incorporated into what would be called a pachinko machine, including the scoring pockets, the slingshot-style flipper and the vertical configuration.

In 1926, some Corinthian Bagatelle machines in Japan adapted features of the “Circle of Pleasure” machines, creating the first real pachinko machines. These vertical, space-saving machines gained universal acceptance in 1929.

Pachinko emerged in Nagoya as a form of adult pastime for the first time in 1930. The Aichi prefecture headquarters granted the first ever license for the operation of a "Gachinko" hall. In 1936, pachinko became an overnight sensation. 35 pachinko parlours opened in Kochi alone in only six months.

The production of pachinko machines was halted in 1937 in order to save materials and manpower for the Second World War. In 1938, all pachinko parlours in Japan were ordered to shut down. It was not until the end of World War II when pachinko parlours began to become popular again.