We generally associate “Pachinko” as a gamble. In principle, gambling is strictly prohibited by the law.
So, if “Pachinko” was a gamble as you think, illegal activities should be rampant publicly around Japan. Does “Pachinko” apply to a gamble or not?
A gamble is prohibited by the criminal code in Japan
In Japan, gambling is basically prohibited except for publicly managed gambling. The ground for gambling prohibition is the criminal code, article 185.
Article 185 A person who gambles shall be punished by a fine of not more than 500,000 yen or a petty fine; provided, however, that the same shall not apply to a person who bets a thing which is provided for momentary entertainment.
Reference: Japanese Law Translation
The proviso that says “however, that the same shall not apply to a person who bets a thing which is provided for momentary entertainment” means specifically like a person who win at gambling treats a looser to dinner.
In short, even if what you do can be regarded as gambling, if betting amout is small enough to be within the rage of momentary enternainment, you are not subject to punishment.
If a product with property value is provided for an accidental result of gaming, the act is regarded as gambling.
For example, if you guess right in horse racing and boat racing as publicly managed gambling, you can receive money, as you know.
It is unmistakable that horse racecourse and speedboat racecourse pay financial return to a person who wins at his betting.
In Pachinko arcade, a customer borrows thousands of metallic small balls in exchange for money. A customers play Pachinko with these balls and they increase or decrease the amount of metallic small balls through gaming. They finally exchange these metallic small balls they won for special prizes prepared by the Pachinko Company.
After that, customers take the special prizes to the Pachinko prize exchange shop which is installed in the Pachinko arcade property and exchange it for money.
The point is whether the acts like the above contains something which is subject to the criminal code. In the current situation, the criminal code that regulates gambling take the stance that there is no problem in the above acts.
The big issue on the interpretation of this case on the basis of the criminal law is if the Pachinko company provides a product with property value to a customer in return for gaming depending on the amount of small metallic balls that a customer gets.
The criminal code under the current judicial system interprets this case like the special gift provided in Pachinko arcade doesn’t apply to a product with property value. So, Pachinko is recognized as just a gaming that belongs to entertainment.
Exchanging a special prize for money at the Pachinko prize exchange shop is a quite gray area where even criminal code doesn’t touch.
In regard to this issue, there has been an endless argument between the opposition party and the National Public Safety Commission since half century ago in the Naional Diet because the police authority unnaturally intervenes this issue.
It is said that there is a back-scratching alliance between the National Public Safety Commission and Pachinko industry. So many retired senior officials of the national police department assumes the executive position of Pachinko companies and get their ways by throwing their weights around this industry.
To allege Pachinko is illegal act, we need to prove the casual relationship providing giving a special prize and exchanging it for money. In short, we neet to prove that the Pachinko arcade and the Pachinko prize exchange shop are run by the same management body. So, which means, basically, Pachinko arcade and the Pachinko prize exchange shop are managed seperately by the different management body. This industry is really good at catching the law regulations off guard.
In Japan, Pachinko is defined as not gambling but just gaming.