If you’re going to do wrong, do wrong right.
For many years, pachinko parlors have stood tall and proud in just about every community across the country as bastions of the human desire to make quick money without having to work for it. Every day, thousands and thousands of people flock to the large and comfortably equipped complexes, seemingly never realizing that the main reason these places are so large and comfortably equipped is that they’re the ones ending up with the money.
It should be noted that pachinko is technically not gambling, however. Japan has frowned on the vice of gambling for most of its history, with the exception of government-run operations of horse racing, boat racing, bicycle racing, and the lottery, as well as a recently enacted law allowing strictly managed casinos in integrated resorts.
▼ You get four forms of gambling and that’s it! OK, fine! Five, but that’s really it!
Even when pachinko players win, they get no money awarded by the parlor. Depending on the performance of the player, they are awarded metal balls by the machine. They’re kind of like the tickets you’d get from a skee-ball machine, and in the same way, you can trade in the balls at a counter in the parlor for wonderful “special prizes” (tokushu keihin). These prizes can be ordinary arbitrary items like pens or lighter flint, but many places nowadays award cards with tiny pieces of gold in them to help prevent counterfeiting.
▼ It takes a lot of balls to play this game.
As luck would have it, right beside, or at least not too far from the pachinko parlor, there is always a store owned by people who seem to really love these special prizes. If you go here, you can sell them for ridiculously more than they’re actually worth and walk away with a nice chunk of change from a legitimate sale of your newfound special prizes. It’s a bit of a silly business model if you ask me, which must be why these places are often very modest-looking and have little to no signage.
▼ On your right is a pachinko parlor and on the left is a shop that buys prizes for a pachinko parlor. It may look like the same business, but that store is technically in a different building and owned by a different company, and what’s with all the questions anyway? What, are you a cop or something?
Of course, since they offer such amazing prices for these prizes, they often end up with too many. But a lucky coincidence strikes again in the form of a wholesaler who is willing to buy those items from the shop, practically at cost, and sell them back to the pachinko parlors, once again, practically at cost. Since these are all legit sales, the government gets its piece of the action in the form of taxes, and everyone’s happy… except those players without wonderful special prizes, of whom there are many.
This circle of life is called the “santen hoshiki” or “three-store system,” and it’s what separates dirty, yucky gambling from shiny, happy free-market capitalism. But should a pachinko parlor take it upon themselves to not follow the three-store system, trouble awaits, as it did recently in Miyagi Prefecture.
On October 30th, it was reported that charges were filed against the manager and operating company of a pachinko parlor in the city of Ishinomaki. According to the charges, on 20 January, the parlor purchased four special prizes from a customer for a total of 3,500 yen (US$22), thus bypassing the three-store system and awarding cash prizes for games of chance. This parlor had since closed down, but the 71-year-old manager confessed to the act. This is the first such case to occur in Miyazaki since 2007.
Readers of the news expressed understandable confusion in comments with regard to what the heck is actually going on with pachinko in Japan in the first place.
“Seriously, why is the three-store system only permitted for pachinko parlors? Has that ever actually been explained?”
“Why go through with all this superficial nonsense? Just ban pachinko for crying out loud.”
“This is kind of absurd, isn’t it?”
“In Asakusa [in Tokyo] there’s an exchange booth for a pachinko parlor right next to a police box.”
“There’s probably some other crime involved they want to look into.”
“Funny how pachinko parlor staff never seem to notice the mysterious little shacks sitting right on their own premises.”
“The three-shop system is inherently illegal, isn’t it?”
“I’ll just go and set up my own three-shop system then.”
While it sounds like a great idea to set up your own casino and only give away prizes that can be cycled through the three-store system, that will likely land you in prison. As mentioned in the comments, this system is only applicable to pachinko and slot machines. All other games are regulated differently.
Casino games are the most highly regulated, and if the house gives out so much as a mustache comb, they’ll get shut down faster than you can say, “A mustache comb? What the f…”
Arcades, or “game centers” as they’re called in Japan, also have regulations on awarding prizes of any kind. One exception are UFO catchers, and this is mainly because in these games, the entire point is to grab the item. However, they are strictly regulated as well, and the prizes they offer cannot exceed a wholesale price of 1,000 yen per item.
▼ That’s a good fact to know when considering a lucky bag claw game.
Another interesting example of pseudo-gambling in Japan are those high-end gacha machines where you pay 1,000 yen for a chance to get a Gucci bag or PS5. The reason these aren’t gambling is because they aren’t even classified as games. They’re technically vending machines from which straight purchases are made, and they will be treated as such as long as the customer never “loses” in the sense of getting an empty capsule or booby prize.
Long-time readers of our site might remember our writer Masanuki Sunakoma getting an endless array of junk from those machines, like gearbox keychains and talon necklaces.
However, the regulation states that the item in the capsule must have a “hypothetical” retail price of what the person paid. That “hypothetical” creates a considerable grey area since a shop could hypothetically sell a bag of chips for 10,000 yen.
▼ You could argue that a shop might conceivably sell the above necklace for 1,000 yen, which is what the machine charged, but selling this plastic dinosaur for that much is really pushing it.
This brings us back to the question of why pachinko parlors get such special treatment. The game in its current quasi-gambling form was largely used as a way for Zainichi Koreans living in Japan to earn a living right after World War II, being otherwise unable to get a job at companies. The yakuza also got involved at the time, either “supporting” or “exploiting” these businesses depending how you want to look at it.
Japan was in a massive state of upheaval at the time, so there was little oversight on these parlors. As things normalized, pachinko had grown into a major pastime, and as the police became more organized, they turned their attention to it. Rather than completely shutting them down, the police opted to drive out the yakuza and allow the remaining owners to continue running their parlors. The three-store system was one method to do this, and the police installed themselves as regulators for the entire industry, again “supporting” or “exploiting” these businesses depending how you want to look at it.
By the late ’80s and ’90s, pachinko had grown into a gigantic industry that was heavily tied into the national economy and employed hundreds of thousands of workers, essentially making it too big to fail. At this point, everyone seemed to just agree that it had gone beyond the point of no return and that the thin veil of the three-store system would have to do.
However, there are serious questions as to how much longer pachinko parlors will continue as they are. With the legalization of casinos in integrated resorts, those with the gambling bug may be more attracted to the glitz and glamor of such facilities, drawing even more revenue away. Parlors are already closing at an increasing pace and may eventually die a natural death before too long, but at least all those machines can go to good use at retirement homes.
Source: KHB, Itai News, Bengoshi.com, Note.com/piki, Pachinko Road, PiDEAX
Images: Pakutaso, SoraNews24
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