By Ben Blaschke
Popular Japanese parlor game Pachinko could benefit from Japan’s integrated resort legislation, according to Union Gaming analyst Grant Govertsen, following strong financial results from pachinko hall operator Dynam Japan Holdings.
Dynam’s share price has surged 22% since January with the increased focus on gaming brought about by Japan’s IR bill seemingly impacting positively on all gaming-related products. That comes despite suggestions in some quarters that pachinko and other forms of gambling could in fact face tougher controls in a bid to appease widespread concern over problem gambling.
It has also been mooted that the new IRs would possibly draw players away from Japan’s pachinko halls, which account for around 4% of the nation’s GDP. But Govertsen predicts otherwise.
“We believe the legislature has enough on its hands in the form of the IR bill and is unlikely to touch the existing frameworks of pachinko, horse racing, etc,” he said in an update on Dynam. “Further, given that pachinko is a homegrown industry, we are inclined to think it could actually get some form of legislative support (protection), especially in the context of the likelihood of foreign-owned IRs.
“Finally, the government already has – over a period of many years – introduced increasingly stringent standards that have transformed pachinko into more of a leisure pursuit and less like gambling via gradual reduction in payout ratios that have eliminated even modestly sized jackpots. Dynam has been in front of the industry in installing these lower volatility machines.”
Dynam is expected to contend for any small regional IRs should they form part of the highly anticipated IR Implementation bill currently being prepared.
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