Japanese shrug off recession, crowd pachinko parlours

TOKYO: In the smoky Maruhan gambling Parlour near Tokyo���s Shinjuku station, Shunichiro Nagasawa feeds a 1,000-yen ($10) bill into a pachinko machine, helping Japan���s biggest gaming industry beat the recession and Las Vegas.

���It���s exciting ��� usually, after I lose many times, I win big the next time,��� said Nagasawa, a 29-year-old systems engineer, pushing a button and watching hundreds of small steel balls pour down through the machine. ���I do worry about the economy, but I still have a job.���

As Japan���s economy shrank at an annual 12.1% pace in the last quarter and revenue slumped at Las Vegas casino companies like MGM Mirage and Las Vegas Sands Corp, the 23 trillion-yen pachinko industry is on a roll. Sales from the machines, which resemble upright pinball games, rebounded 0.5% in last quarter, reversing a six-year decline, and rose 0.9% in January, according to government statistics.

���There are many companies in the red ��� automobile makers, electronics and so on,��� said Hirohito Niji, an analyst at Standard & Poor���s in Tokyo. ���Against that, pachinko hasn���t really felt the effects.��� That���s good news for holders of ���pachinko bonds��� ��� debt backed by securitized gambling revenue ��� and for equipment makers including Mars Engineering Corp, the best performer in the 124-stock Topix Machinery Index in the past six months.

Kyoto-based Maruhan Corp, the biggest pachinko-hall operator by sales, forecast net income will rise 11% to 20 billion yen in the fiscal year ending March 31, according to a statement on its Web site. Operators aren���t publicly traded and typically don���t provide financial information.

Casino gambling revenue in Las Vegas fell the most on record last year and dropped 15% in January as the US recession curbed spending on travel and betting. Shares of MGM Mirage and Las Vegas Sands fell more than 95% in the 12 months through March 27.

Introduced in the 1920s, pachinko is played by about 13% of Japan���s population, who fed 23 trillion yen into the machines in 2007, according to the Japan Productivity Center for Socio-Economic Development. Numbers are down from 16% of the population and 29.6 trillion yen in 2003, a drop caused by a regulatory crackdown on types of machines that encouraged heavy gambling.