By: Josh Thornton

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• By Josh Thornton

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The question

• How have the pachinko parlors in Japan become an
  enormous business in Japan as a form of gambling,
  where gambling is illegal?

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Pachinko

• Vertical-sitting Pinball-like game
• Involves nearly no skill
• Played by shooting hundreds of tiny metal balls
  into the machine
• If balls fall into certain holes you win more
  balls.

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Gambling in Japan

• Is generally illegal, with exceptions for a
  nationally run lottery, horse racing, and similar
  events.
• Is done illegally through the game pachinko at
  pachinko parlors

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The Parlors

• Are filled with constant noise from the machines
• Cram as many machines, and thus people as close
  together as possible
• Are the only public place in Japan where smoking
  is allowed
• Quite an unsociable place.

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The Balls

• Pachinko Parlors sell the balls used to play
  pachinko for 4 yen (roughly 3.5 cents) a piece.
• The balls are constantly shot into the machine
• Can use hundreds of balls in a matter of minutes.

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How is Pachinko Gambling?

• Parlors found a loophole
• Prizes at the parlor must be less than 10,000 yen
• Include
• CDs
• Cigarettes
• DVD players
• Parlors also offer a dummy prize
• It can be taken to another location and be
  redeemed for cash
• It is estimated that roughly 95 of pachinko
  prizes are exchanged for cash

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Odds?

• Most players end with more balls than they
  started with
• Balls have less value when traded in though
• When traded for cash, the 4 yen balls are only
  worth 2.5 yen.
• Thus, Somebody who turns 100 balls into 150 is
  only getting the money for 93.75 balls
• Have to win substantially in order to profit

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Parlor Tactics

• Tweak Jackpot odds
• Higher when busy
• Advertises people winning to everyone there
  because of the noise
• Lower when slow
• Make up for the busy hours by milking players
  during the slow periods
• Machines are tweaked everyday so balls will move
  differently in the same machine each day to
  prevent anybody from learning a machine.

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How big of an issue is it?

• The parlors brought in 27.45 trillion yen in 2006
• Average Japanese Adult loses roughly 400 a year
  gambling.
• Over twice what the average American loses
• Japan has 10 times more gaming machines per
  capita than the United states
• And remember, this gambling is ILLEGAL in Japan

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Conclusions

• Pachinko has allowed Japanese to pretend they do
  not gamble while Gambling more than most other
  people in the world.
• Through their prize exchange loophole, they
  managed to circumvent the law of Japan.
• While everyone is aware of the illegality of it,
  nobody in Japan honestly seems to mind the
  existence of the parlors, nor their illegal
  activity.
• The parlors arent going anywhere anytime soon.