If the strength of the Japanese turnout at Longchamps yesterday is anything to go by, gambling is alive and well in that nation. Deep Impact, the Japanese contender, failed to win the famous Prix de l'Arc de Triomphe race and millions of Euros were lost by the Japanese bettors who were said to have brought large amounts of money from friends and family to gamble on the Japanese champion racehorse conquering the field.

At home in Japan it is the Pachinko industry that has been at the forefront of gaming activity. Moves to legalise casinos, which will probably lead to a vote in government next year, would threaten pachinko dominance at a time when revenue is falling. Over the last decade patronage has declined from its peak 30 million in 1994 to an estimated 17 million in 2005. All Pachinko-slots (pachi-suro), higher paying and more popular machines, must be removed by July 2004, which has already had an effect on sales for companies such as Aristocrat Leisure.

Pachinko was originally a form of recreation in a country where ‘hard’ gambling, other than on the horses, boats and lotteries, is illegal. Prizes should be limited to small gifts but the law is widely circumvented by the exchange of these prizes for money at nearby premises, the gifts being returned to the pachinko operators. If a new gaming law is enacted then pachinko halls, numbering over 15,000 in Japan, would have to operate with more transparency.

With the advent of casinos on the horizon, the pachinko industry may have to revamp its image. One operator of a chain of pachinko halls has already introduced machines requiring more skill and dexterity that have a better payout ratio. The machines were launched just over one year ago and now account for about 25% of business. (E-10.02.06)

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