IR bill delay could be positive for pachinko

Tuesday 4th of July 2017

The outcome of Tokyo’s local elections on Sunday is likely negative for IRs, but could be a relief for Japan’s pachinko industry, says Union Gaming.

On Sunday, as part of an election for the prefecture-level parliament of Tokyo, the Liberal Democratic Party (LDP) lost nearly two-thirds of its seats in the 127-member assembly, from 60 to 23. The results are being seen as a rebuke to PM Abe and the LDP and their associated policies.

“With this in mind we believe the Tokyo defeat for the LDP, and by implication a weaker outlook for the LDP nationally, will make it incrementally tougher for PM Abe to push through his agenda, including the very contentious IR issue,” said Union Gaming.

The brokerage says the result of this could be that the IR bill does not come into fruition until after the election year in 2018 - or it becomes “watered down with cumbersome regulations.”

The delay could be a relief to the pachinko industry, which has experienced a decline due to increasingly tightening regulations.

“Over the years the NPA has continually stiffened regulations… and as the separate problem gaming bill has taken center stage, we believe this has put additional pressure on the NPA to… [make] pachinko even more restrictive.”

“In the now-more-likely event that the IR bill doesn't come to fruition this year (and possibly next year too) due to the LDP's political fortunes, we would view this as a positive for the pachinko industry as it could result in a regulatory reprieve,” said the analysts.

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