About Pachinko Industry Employment and Income Taxes

About 310,000 People Employed in Pachinko Parlors

According to the Economic Census for Business Frame conducted by the Ministry of Internal Affairs and Communications (MIC), about 310,000 people were employed in the pachinko industry in 2012. The pachinko industry body announced that 254,000 people were employed as of 2014. A third-party pachinko parlor management monitoring organization summarized trends of employment in pachinko parlors, based on these figures.

Numbers of People Employed in Other Industries

Number of People Employed in Each Industry in 2012
Number of People Employed in Each Industry in 2012

This figure is smaller than those employed at supermarkets, which is about 429,000. However, it is well over department store employment, which is about 79,000, or the total number of employees in the eleven major automakers, which is about 208,000. The total number of convenience stores is about 4 times larger than that of pachinko parlors; however, only about 719,000 people are employed by them. This figure is only 2.3 times larger than pachinko parlor employment. So, it is clear that pachinko parlors have not only significant sales, but also contribute greatly to the country’s employment.

Based on the Current Survey of Selected Service Industries conducted by the Ministry of Economy, Trade and Industry, the average number of employees per business establishment (pachinko parlor) in 2015 was calculated to be about 26.4. Of these employees, 11.6 people were employed full-time and 14.8 people were employed part-time. This clearly shows that a pachinko parlor operates as a human-resource-based services business while it is closely connected with the process industry.

Pachinko Parlors Hiring Many New Graduates

The third-party organization mentioned above describes pachinko parlors as follows: “Pachinko parlors are a giant industry that directly employs more than 310,000 people and has created a total of more than 500,000 jobs including employment in other related industries. It should be regarded as an industry that contributes significantly to society.” Like pachinko parlors, other fields related to the pachinko parlor business (gaming machine manufacturers, ancillary equipment/device manufacturers, dealers, pachinko prize wholesalers, etc.) also contribute greatly to job creation. In particular, the major game manufacturers and device manufacturers that have gone public (i.e., undertaking an initial public offering (IPO)) are very popular among students. Many of them tend to hire many new graduates. The hiring of new graduates varies depending on the sales volume of the pachinko parlor and the business development of the company. However, some companies that run multiple pachinko parlors hire more than 200 new graduates a year. One company that runs pachinko parlors across the country hired more than 500 new graduates at its peak.

An increasing number of such companies are beginning to improve their work environments and training programs. The pachinko industry was said to have a high employee turnover rate due to long hours of hard work. However, many of the companies are making efforts to improve their employment conditions by offering better benefits and training programs, developing executive candidates, enhancing self-development programs, etc.

Taxes Paid by Pachinko Parlors

According to research conducted by a pachinko industry body in 2015, a total of 68.7 billion JPY in income tax was estimated to have been paid by pachinko parlors. This figure was calculated by multiplying the number of gaming machines installed across the country (as calculated by the National Police Agency) by the result (tax per unit) obtained from the questionnaires completed by 8 companies running pachinko parlors.

Every year, the pachinko parlor industry is ranked high in income tax false declaration accusation rate and tax evasion amount according to data collected by the National Tax Agency. However, there are many areas under the regional taxation bureaus in which the pachinko parlor business is not ranked high in either income tax false declaration accusation rate or tax evasion amount. It is not clear why there are such differences amongst areas. Each local pachinko industry body holds tax payment related training sessions/seminars at regular intervals to encourage correct tax payments.