Legal Casino Gaming in Japan threatens Pachinko

For years, pachinko parlors have ruled the Japanese gambling world. Something of a cross between pinball and slots with prizes on the line, pachinko remains the only quasi-gambling option in the country. However, this could change in a huge way if Japan chooses to legalize casinos.

The country’s prime minister, Shinzo Abe, wants to a law that would legalize casino gaming within the next few months. If the law es as expected, it would open the door for giant resorts to be built in the Land of the Rising Sun. Las Vegas Sands and MGM Resorts are just two of the companies that have expressed heavy interest in entering the Japanese market. Given that Japan has a population of over 127 million people, there will likely be more companies clamoring to build gaming resorts.

So where does this leave pachinko? Likely with a much smaller customer base than it currently has. The game has already seen a big decline over the past decade. Aside from the looming threat of casino gaming, pachinko is often seen as something that old people do – much like bingo in the United States. This unpopularity with younger adults has led to the game’s overall customer base being cut in half since 2002.

Even still, pachinko is big business in Japan. There are over 12,000 parlors throughout the country, and they earned a combined 19 trillion yen ($175 billion) last year. And one in seven Japanese adults play pachinko on a regular basis. So there is plenty of motivation within the industry to survive, even if they’re eventually competing with casino resorts.

Dynam Japan, the country’s second-largest pachinko parlor chain with 380 locations, has plans to open 1,000 more parlors in the coming years. Their plan is to attract more players by creating a better overall experience. This includes air-conditioned buildings complete with restaurants and game attendants. They’re also looking to establish more non-smoking parlors – an obvious move to cater to the younger crowd.

But will all of these measures help Dynam increase their profits in the face of casino legalization? That’s a question that it looks like the company will eventually have to answer soon. If not this year, casinos are probably going to be legal by next year as Prime Minister Abe fully backs the idea.