Pachinko gambling scheme

Factual Questions
1

Here in Japan, gambling is strictly illegal, however, anybody who’s ever spent any time over here knows Pachinko is very popular, and exists in every decent sized town across the nation. How it works is this:
A. People plunk their money down and buy ball bearings, which they use to play with.
B. After they’re done playing with their balls (sorry, it just came out like that :slight_smile: ), assuming they win, they trade their balls in for some kind of trinket. An example would be a plastic cigarette pack.
C. The trinket is taken down the street to ‘Store X’, which just so happens to be interested in purchasing these trinkets for good sums of money.
D. Everyone is happy.

Now my question is this: How come obvious scams like this are allowed to perpetuate? Not that I care, in fact, I’m glad they are, but can something so transparant work in the states, or other countries? What legal grounds would the cops have to bust-up this kind of operation?
Thanks for your time, I know this was a long question…

2

You noticed you can’t get money at the parlor. You have to run down the street and exchange it. There is no law against people buying trinkets for money. As long as you don’t exchange money in the parlor you are OK.

http://www.pachinko-hangout.com/www/p8.htm

3

Thanks for the link, but that’s basically saying what I said. Why can’t something like this be run in the states?

4

In the US, they would probably re-draft the law to close the loophole. I wonder if the Yakusa’s influence over legislators has anything to do with the fact that Japan doesn’t re-draft its laws, or simply legalize low-level gambling?

5

I think it’s simpler than that. Nobody really cares about it - they don’t want to be seen as advocating gambling but they don’t mind the gambling that is going on right now. Same with prostitution - I understand there are plenty of loopholes that allow that in Japan. (No first-hand experience though.) I think the US is unusually strict about such moral issues.

6

Most Pachinko parlors are run by legit businessmen, not Yakuza. Yakuza mostly stick to drugs, protection, and prostitution, although the occasional Pachinko parlor does come in handy to make dirty money clean again.
Anyway, I don’t see why lawmakers fuss over people having a good time. Let’s look at Skeet-ball. Remember Skeet-ball? You pay a quarter, roll a ball into a target, and win tickets. Then you’d take the tickets over to the counter and trade them for trivial prizes. Now let’s take this one step further and have a pawn-shop down the block that purchases these prizes for money. This is essentially how the pachinko system works, except it’s $25 instead of 25 cents to roll the balls.
Could I start a casino in the states that awards tickets?

7

Damn, I can’t find that stupid book. . . (So no cites.)

Anyway, I read an article by a Japanese economics professor about pachinko in which he says that a very significant portion of parlors (2/3?) are owned by Korean immigrants. And to give you an idea of how popular it is, he estimated that Japanese spend more money annually on Pachinko than on cars.

I believe one of the reasons no one does anything about the loop hole is that considering the amount of profit generated and the number of players, changing the law would almost certainly amount to political suicide.

8

To expand on scr4’s reply, one reason the loophole remains open is the Japanese concepts of “tatemae” and “honne” (loosely appearances and reality). These concepts can be seen throught Japanese law. There are a large number of laws which provide loopholes which are ignored, as long as the offenders aren’t too open in their total flagrant violations of the spirit of the law. IMHO, custom still carries far more weight than law here in Japan.

With gambling laws on the books the government can say they’ve outlawed gambling (the “tatemae”), but they’ve really done nothing of the sort ( the “honne”). And most people don’t really care.

The liquor licensing laws have an almost identical loophole. The unlicnesed bar has a small token vending machine. You buy tokens and use them to pay. Thus the bar doesn’t exchange liquor for money and, voila, they don’t need a license. They set the machine for 1000 yen notes and are thus able to take in 1000 yen at a shot instead of the 300-500 for a beer. I know of at least three bars opertaing this way, and was told by one operator of the details of the scheme.

Prostitution has a different loophole, but it’s an interesting one. IIRC, soliciting, pimping, and operating a brothel are illegal. One maight note that these were made illegal just in time for the Tokyo Olympics because Japan was supposedly worried about it’s international image. However, it’s only illegal if there’s genital-genital penitration (again IIRC). Oral, anal, and other sexual practices can be legally bought and sold. Thus a wide vareity of sexually oriented businesses not only operate legally, but advertise and can sometimes be seen featured on TV shows. One memorable instance was a late night TV program, on a mainstream national network, which introduced a number of prostitutes and their specialties (ala “This is Keiko. She’s a fellatrix.”). One of the shows all male staff went off stage, supposedly recieved the girls services, and came back to give a review. I doubt that would get airplay on a mainstream network even in Nevada.

9

AAArrrghhhhh!!!
Sorry, I had to do that. Thanks for everyone’s input, but I guess I’ve been phrasing my question wrong or something…
I know tons about Japan. I’ve been here eight years now. I live in Tokyo now.

What I’m asking is if this sort of scam could be so easily pulled off in the states without the cops busting it up! What legal grounds would the cops have to bust you (in the states)?

10

I’m assuming that instead of casinos (which, given the situation today, are perfectly legal in many places as long as you’ve filled out the required paperwork, posted any required bonds, hired workers, abided by laws concerning children, etc., etc., etc.), you’re looking for an inexpensive and easy way to get the same kind of cash as a casino owner. Like a room full of skill game machines: pachinko, Skee-Ball, bingo, and others.

Maybe you could. You’d have to check local ordinances, though. And you’d probably have to make sure that any redemption for cash is done away from the premises where the machines are located, so it doesn’t look like your players are gambling.

A variation has been tried before: in the 1950s, there were bingo machines (related to pinball games). Like pinballs, bingos paid off in free games, but the free game counters went so high (who could really play off the top “prize” of 999 free games?) that it was simpler for the owner to “buy” the games back from the lucky player.

This buying by the house and selling by the player disguised the fact that the player was really wagering that he could post enough games on the machine to win (er, sorry, that should be sell them for) more cash than he put into the game to play.

In other words, gambling. And that’s probably why your idea wouldn’t work in the US: because bingo machines had a loose association with gambling such as you describe, they (and slot and so on) machines were outlawed in most American jurisdictions. Yes, a sales transaction such as you describe is perfectly legal, but if the machine itself is illegal to begin with…? Like I said, check local laws.

Assuming that you can legally operate with bingos, Skee-Ball, and pachinko according to your scheme, and you do follow any other applicable rules concerning operating a gambling house, somehow I can’t see the average North American gambler putting up with the inconvenience of going to a prize counter, selecting something, then going down the street to sell it. Much easier to try one’s luck at a slot machine (or similar) in a nearby legal casino.

In other words, your idea might not fail because it is illegal; rather, it might fail because North Americans aren’t willing to jump through such hoops when an easier legal alternative exists.

[Bingo machine information, and info on the legality of such machines, comes from Roger C. Sharpe’s Pinball (New York: Dutton, 1977), pp. 55-56.]

11

Spoons, thank you. That was very informative. So the scheme might play out in America. Good good good. Thank you. Not that I have any plans to do such a thing, I just like to ponder things are technically legal, but piss off people who would like it to be illegal. Hmm… Does that mean I have a criminal mind? Funny, I don’t feel evil. I just like to beat the system.

12

Arcade guy checks in. The magic words here are skill game bingo and pachinko are not “skill games” there has to be a component of manual skill which influences the outcome. Many current arcade games walk a very fine line here.
Skee ball is perfectly legal and IIRC (i will check tonight at work) you could have a skee ball machine that costs $5 to play and dispenses tons of high value tickets to winners. The thing to remember most arcades will run something like an average of 25% payout.

Uh huh, sure. Have an “arcade” with a liquor licence and nothing but ticket games. I’m visualizing a couple old guys with cigars at a skee ball swearing about missed rolls, drinking beer, and making statements like “I’ll get that Harley if its the last thing I do!!”. Vice would live on your doorstep. I will hit up the arcade manager tonight, hes had to go through a “gambling machine” investigation and is pretty current on the laws pertaining to such things.

You would also have to take up security a notch or two, we occasionally have ticket bays broken into in a low value venue. Tickets with a face value of like 100 points each for a higher payout machine would be tempting targets. Machines that print vouchers would be the way to go there.

With a high enough payout ratio you could probably run a pretty popular legal place with some kick ass prizes. Heck we gave away a $200 value bookshelf stereo system last night to a guy who nailed a progressive jackpot a few times over the last few weeks.

13

Now, that was an answer I was expecting.
Spoons say it’s OK,
Drachillix says there’d be cops on my doorstep.
What could the cops do? What happened with your manager? Hmmm…
Starting a pachinko parlor in the states would be interesting at the very least…

Pachinko also happens to require a certain amount of skill. It isn’t just watching balls fly around. There’s a knob that you turn to increase or decrease the initial velocity of the ball, which in turn steers the ball towards a target.
It’s a mixture of skill and luck, but what isn’t?

14

Only on the “dosen’t look like gambling” idea. In the US many judges do not look kindly on those who obey the letter of the law while violating the intent. So having a prize buyback down the street would not fly.

You might sell it to a really stupid jury but pachinko, at least in my limited experience is far more luck than skill (like 80% luck) I havent seen an actual pachinko in probably 10 years though so if they have done variations that are more target oriented and less bouncing around hundreds of little pins then I would say legal. The machines I have seen would be totally illegal as “skill games.”

I spoke with one of the arcade managers and he personally loves the idea of a “high roller” skill game arcade. It would be perfectly legal and in some aspects far more profitable and or easy to run. We spent about 20 min brainstorming cool little aspects like decor and layout if we were to convert the area we are in. I think, especially in a big city there could be a market for such things, just a matter of drawing them in and hooking them. With the higher revenue per game it would more feasible to run higher payouts

Sample payout structure, $1 to play, 9 ball skee-ball with rings marked 1,3,5,10,15. The ring value = tickets dispensed, max payout would be 135 tickets on a 1 game. Average would be somewhere in the 50-75 range leaving you a profit of .25-$.50 per game played leaving you actually a bit ahead of the revenues of a standard arcade version. If you wanted to get really wild you could run progressive jackpots too for perfect games or multiple perfect games in a row. We had a progressive on ours that was being hit about once every two weeks for a payout of about 1500 tickets on average.

15

AFAIK they’ve been in Las Vegas since the 70’s.
:::googles:::
Well I was sort of right:
http://casinomagazine.com/managearticle.asp?c=290&a=467

They used to require some skill before they were all computerized. Now a central computer set the payouts odds for all the machines in tyhe parlor.

16

How does this relate to skill? AFAIK any game like this is based on straight probability. Example would be something like a blackjack or poker machine. Card deck probability is pretty damn simple. If the odds of drawing 4 of a kind are 200 to 1 and you pay out 100 to 1 and keep a similar payout across the combinations you will have a 50% payout averaged across thopusands of games played. IIRC it is illegal to have software to adjust odds/win probabilities on the fly. There very well may be places that own this type of machine but I hope not. Now I realize payout levels can be adjusted but it is within a range

Example:
(http://www.casino.com/slots/article.asp?id=226

17

http://www.casino.com/slots/article.asp?id=226

18

In a lot of the bars near me they have a small tabletop “skill” video machine that lets you play different card games for a quarter. Ohio state law allows these games since they’re clearly marked “for entertainment only” just like a pinball machine but if you’re a regular, the bartender will payoff winners. Since the machines have no way of giving back money, it’s all under the table and not openly done. A lot of private clubs like Vets Clubs have them too. As for me, I prefer Vegas.

19

Actually, I believe I said, “Check your local ordinances.” There may be cops on your doorstep, depending on the kind of machines you are using. A pinball machine that awards free games for skill may be perfectly legal, while a slot machine that awards cash for luck may not be. Pachinkos and bingos and Skee-Ball would likely fall somewhere in between, so you should check carefully.

Drachillix posts a very good answer, especially about obeying the law while violating the intent, which seems to be what you are proposing, Marky. The legality of your scheme seems to rest on whether the machines you intend to use are legal in the area in which you intend to use them, and how stringently the local police would enforce game machine laws and gaming regulations.