| Pachinko (パチンコ) is a type of mechanical game originating in Japan that is used as a form of recreational arcade game, and much more frequently as a gambling device, filling a niche in Japanese gambling comparable to that of the slot machine in Western gambling.Pachinko parlors are widespread in Japan, and usually also feature a number of slot machines (called pachislo or pachislots) so these venues look and operate similarly to casinos. Modern pachinko machines have both mechanical and digital components.
Gambling for cash is illegal in Japan, but the widespread popularity of low-stakes pachinko in Japanese society has enabled a specific legal loophole allowing it to exist. Pachinko balls won from games cannot be exchanged directly for money in the parlor; nor can they be removed from the premises, nor exchanged with other parlors. However, they can be legally traded to the parlor for so-called "special prize" tokens (特殊景品 tokushu keihin), then legally "sold" for cash to a separate vendor off-premises. These vendors (ostensibly independent from, but often owned by, the parlor owner) then sell the tokens back to the parlor at the same price paid for them — plus a small commission, creating a cash profit — without technically violating the law.By 1994, the pachinko market in Japan was valued at ¥30 trillion (nearly $300 billion). In 1999, sales and revenue from pachinko parlors contributed 5.6% of Japan's ¥500 trillion GDP, and they employed over 330,000 people, 0.52% of all those employed in Japan. As of 2015, Japan's pachinko market generates more gambling revenue than that of Las Vegas, Macau, and Singapore combined. Pachinko gambling's grey market nature and tremendous profit historically resulted in considerable infiltration by Yakuza, who used it as a vehicle for money laundering and racketeering; but since the 1990s, this has been less of an issue due to police crackdowns. |
