The trickle-down effect
Pachinko is a national obsession -- but who's winning?
Text and photographs by ERIC PRIDEAUX


It's late in Tokyo's Yurakucho district, and the pachinko parlors clustered here have shut off their garish neon signs. The consoles through which the game's trademark metal balls are sent cascading have gone quiet, and the hard-core players who hang on until closing time are scurrying out onto the pavement to make the last train home.

With the customers gone, it's time for parlor manager Yoshimasa Ono to get down to the most important work of the day: "adjusting" the nails that guide the balls down the consoles' panels, thereby subtly affecting the outcome of a game.

Laboring through the night in this monthly ritual, Ono taps the tiny nails this way and that -- upward just a smidgen to slow the descent of a ball or downward to speed it on its way. Stubborn nails are tamed with the cloven end of an awl-like hand tool. To check his handiwork -- and stave off complaints from players -- Ono runs through the course of each console manipulated to make sure the balls won't get stuck. Now the parlor is ready for another day of business.

"It's all in the nails," Ono says.

Hold on a minute. Pachinko is far and away Japan's most popular gambling pastime. Annual revenues of 28.7 trillion yen across the industry surpass the 17.6 trillion yen value of the vehicles manufactured at Japanese automakers last year and dwarf even the country's 4.96 trillion yen defense budget. Pachinko is huge.

And it's . . . rigged?

Finding the balance

Of course. But that doesn't bother the people one would expect to complain the most -- the players. Anybody who regularly visits a pachinko parlor is aware that machines are, well, fine-tuned, and players tacitly accept the practice since the nails are often bent in their favor. Parlor owners, for their part, believe leaving the odds purely to chance is no way to run a business -- especially with a recent dropoff in patrons.

"If my customers never win, they'll have no reason to come back. If they win too much, I get crunched. It's about finding the proper balance," Ono says with a chuckle. "The hardest part is making the nails look lucky when really they're not."

An experienced player focuses on distinguishing gushers from money traps. Take 41-year-old Kyoko Hirooka, who has played pachinko half her life. Before sitting down at a machine, she takes a good look at the maze of nails on the panel. She wants to make sure, for example, that the ball will be steered into the profit zones by the four ten-kugi, or "sky nails," on top of the board and by the hakama nails, further below, named after the formal Japanese pants whose bellbottoms they resemble.

"Some people only care about winning, but for me it's great fun just to read the layout," explains Hirooka. "Each shop has its own idiosyncrasies."

The battle of wits between parlor managers and their clientele, like many aspects of the game, remains obscure to outsiders. That, of course, is largely by design. After all, gambling is essentially illegal in Japan, yet most of the 20 million people who play pachinko do it to win cash. Why draw attention to the industry when it is only because of legal loopholes that it is so successful?

Ignorance of its inner workings aside, many Japanese wrinkle their noses at the mere mention of pachinko, mindful of frequent news reports of pachinko-related muggings and robberies. And who hasn't heard accounts of children left to suffocate in sweltering cars outside parlors while negligent parents play? It is little wonder that the game is commonly associated with crime and gambling addiction.

Yet there is nothing intrinsically illicit about what a pachinko parlor offers. A player pays a fee to "borrow" an initial supply of balls to feed the machines, using a single knob to try to control their speed and trajectory as much as possible. The object is to land lots of balls in a gizmo in the middle of the panel that churns out yet more balls in a series of mini-jackpots. When a player is finished, the balls are exchanged for prizes, including chocolate, perfume, cans of Nozaki's Corn Beef, Vienna sausage, cigarettes, electric shavers, jewelry and toothpaste. Big winners can request nuggets of gold encased in clear plastic. All perfectly aboveboard.

Pachinko becomes a form of gambling when punters take prizes that qualify for exchange (nuggets in some places, ballpoint pens in others) to tiny shops usually located just outside the parlor's doors to trade their booty in for cash. The Law Regulating Adult Entertainment Businesses prohibits parlors from handing over cash for balls, but it is technically legal for these keihin kokanjo (prize-exchange facilities) to make the transaction as long as they are under separate management from the parlor. Some players have been known to take home as much as 500,000 yen in cash on an outlay of only a few thousand yen. Anybody curious can give pachinko a try for pocket change.

This exchange system is said by critics to violate the spirit of the adult entertainment business law, and it may come as no surprise that the yakuza muscled their way into the exchange business decades ago and, until recently, made a mint by transferring the prizes back to pachinko parlors indirectly and for a profit. The system is still used today to skirt gambling prohibition.

Added to that, Reikichi Sumiya, a noted writer on organized crime, claims police form inappropriate ties with the pachinko companies they inspect. He and other experts say police often ignore exchanges of gifts for money that break gambling laws -- and in return large numbers of former officers now fill cushy, well-paid posts at pachinko-related companies.

A police official who asked not to be identified defended the practice, saying the presence of retired police in the pachinko world helps keep mobsters away.

Reducing yakuza involvement may have solved one problem, but it has caused another, said Sumiya. In response to the loss of their pachinko revenue, he said, the syndicates have stepped up sales of amphetamines. "Law enforcement isn't functioning," said Sumiya. "Pachinko parlors shouldn't even exist."

Stemming the flow

Because of the Byzantine nature of the pachinko business, and because players payed for balls with cash, until recently it was impossible to chart the flow of all revenue at the companies involved. In a twist with diplomatic implications, authorities have long suspected that ethnic-Korean parlor managers with allegiances to North Korea funneled large sums of money to Japan's neighboring rival -- funds it was feared were used for weapons development.

Public criticism over the suspected transfers rose to fever pitch in the late 1980s. To improve checks, police prodded parlors to install game machines that could only be played with easily tracked electronic prepaid cards, rather than cash.

For a while crooks made a killing with fake cards. But new technology has wiped out forgeries, and today third-party companies that tally purchases of the prepaid cards are able to graph -- in real time -- the volume of money at pachinko parlors around the country. Authorities use that information to crack down on financial impropriety and levy taxes. Though the issue remains shrouded in mystery, according to industry insiders the framework also appears to have stemmed the flow of money to North Korea.

Experts say the electronic network is so sophisticated that similar systems at Japanese banks and securities firms are primitive by comparison. And criminals with the necessary technological skills to embezzle money are few and far between, said Eiji Han'ya, an accountant in Tokyo who reviews the books of some 20 pachinko companies. "Pachinko is far more transparent than in the past," he says.

Still, there is more work to be done. Parlors say that in a common scam, gangs break into parlors to tamper with machines, and then give money to accomplices to play the fixed units. The accomplices hand their winnings over to the mobsters -- an arrangement that squeezes the pachinko halls. Managers are fighting back by e-mailing each other information on known felons. "Crime hurts the profits of any pachinko parlor, so we are doing our best to wipe it out," says Shigenori Yamada, chairman of the Japan Gaming Industry Federation.

While showing riffraff the door, parlors are also spiffing up their interiors in a bid to attract the most desirable of all consumers -- young women with lots of disposable income. Parlors' top priority is to lose their image as havens for downcast, middle-aged men in suits. This helps explain why the cramped women's toilets of the past are giving way to spacious facilities with lots of shelf room for cosmetics kits. Many parlors even have women-only playing areas. Older women, of course, are also welcome, and accommodations have been made for them as well. Some parlors, for example, have set up refrigerated lockers so Mom can stop off for a game after shopping and still keep the groceries fresh.

Women, who once made up only a small portion of total players, now account for a fourth, said Yamada. "And when more women come," he adds, "men will follow." Now that is business sense.

The future is now

For a glimpse of the pachinko hall of the future, visit Maruhan Pachinko Tower in Tokyo's Shibuya district. A play-till-you drop pachinko palace, with 644 pachinko machines, this joint is to traditional parlors what shopping malls are to a country corner shop. Like its stodgier competitors, Maruhan is bombastically loud -- so loud, in fact, that many customers plug their ears against the din of crashing balls. In addition to the inevitable guys in suits, there are women of all ages toting designer purses and fashionable college-age kids. On a recent afternoon a bespectacled man in slacks lumbered through the isles, scrutinizing each game he passed. A professional?

In total, some 5,000 visitors patronize Maruhan's four floors every day. What brings them here?

"New machines," said Maruhan spokesman Yoshiyuki Matsuoka, explaining that fresh units adjusted to be generous with payouts are installed every few weeks. "People line up early in the morning for a seat on those days."

Matsuoka went on to say, though, that the store's decor -- something like an airline lounge for frequent fliers -- plays just as big a role in pulling customers away from competitors. Thanks to state-of-the art ventilation, nonsmokers needn't go home smelling of tobacco. After a strenuous round of play, patrons can relax over a coffee and sandwich at the second-floor cafe. Maruhan has waved goodbye, too, to the military "Battleship March" and the theme from "Rocky," once the standard background music of any pachinko parlor. Instead, it pumps breezy riffs of jazz over its speakers.

Considering pachinko's sizeable place in modern Japanese society, it is hard to imagine its humble beginnings nearly a century ago as mere children's entertainment. Scholars trace the game back to an early 20th-century American prototype of pinball called the Corinthian, in which balls that were shot onto a horizontal playing surface fell through holes protected by nails. The games, dubbed korinto gemu, were brought to western Japan during the mid-1920s and were an immediate hit with corner-shop owners, who used them to lure kids inside to try to win prizes that were usually fruit or candy.

Soon, the game appeared at street fairs, where it was so popular with adults as well as youngsters that vendors pressed for space turned the wood-and-glass frames upright to make more room for customers. Players affectionately called the game pachi-pachi, gachan or gachanko -- onomatopoeic words that describe the crackle of the bouncing balls. Over time the terms fused together to become the pachinko of today.

Through the decades, manufacturers spruced up the pre-World War II era machines with flashing lights, flippers and slot-machine-like reels. The modern pachinko game, with more than 100 patented components, is a cornucopia of technology. Nowadays, built-in displays with flashy graphics are the main attraction. One model comforts losers with an animated jig by a toothless old man, while another features a shapely mermaid who winks and waves at more successful players. But to traditionalists, these aren't necessarily changes for the better.

"Everything's so digital nowadays," laments Naoya Nakagawa, a top official in the Japan Association of Game Machine Makers in Nagoya. "In the past, it was flippers and other moving parts on the panel that made the game interesting. We manufacturers are pushing back in that direction."

After all, when it comes down to it, the real essence of Japan's favorite form of gambling is something that can't be programmed or hardwired. "Pachinko is a physical thing," said Nakagawa. "When a player's heart goes pitter-patter, that's thanks to the balls and the nails."

Copyright The Japan Times: April 7, 2002
(C) All rights reserved

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