The underworld is extensively involved in the pachinko industry, which makes an inviting target because of the large number of cash transactions. The practice of under-reporting pachinko revenues is well known, and was even a focus of a popular movie by Juzo Itami, Marusa no Onna (A Taxing Woman, 1987), about a diligent investigator for the Japanese IRS. Despite some recent moves to tighten control over the industry and a few high-profile tax evasion prosecutions, there is a long-standing pattern of public and official indifference to the industry’s underworld ties, as well as tolerance for the accompanying illegal activities.
When a pachinko parlor customer opts for a “special” prize, he or she must take that prize elsewhere to receive the cash payoff. Because the cash payoffs are illegal, they cannot take place openly within the parlor itself. Typically customers are directed to back-alley locations where they make the exchange through what often is literally a hole in the wall.
The party on the other side of the hole in the wall (you will rarely see anything more than a hand when you make the exchange) is a kind of sub-contractor who dispenses cash for the special prizes and then sells the satta king prizes back to the pachinko parlor with a fixed margin added on. Thus, the qualifications for operating this kind of exchange business are a certain amount of operating capital and a willingness to engage in an activity which is, strictly speaking, illegal. Special prizes are typically items such as bars of plastic with fake pearls embedded in them or flat “gold bars,” although these change periodically and seem to vary by geographical region.
An entire peripheral industry has grown up to serve hard-core players’ unquenchable drive to win. There are a host of specialty pachinko magazines (a recent trip to the Kinokuniya Bookstore in Shinjuku, one of Tokyo’s largest, turned up 17 different magazines on the newsstand), and even schools teaching the latest on how to beat new machines. If you’re interested in reading about pachinko, however, be forewarned that the magazines also feature lurid pictures of nearly nude women, mostly in ads for various types of “escort services.”
Part II of this story will examine the specific equipment used for pachinko, some winning tips, as well as industry changes.
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