Scientific Game

Japanese pachinko operator Okura Holdings looking to buy-out rivals

Friday, 20 October 2017 06:42
Visit us

Japanese pachinko hall operator Okura Holdings has outlined plans to expand by taking advantage of increasingly tough regulations governing pachinko and pachislot machines to acquire smaller operators.

The details of Okura’s ambitions are outlined in the company’s annual report and come despite a difficult year in which gross pay-ins declined 12.2% to ¥37.7 billion (US$334.9 million) and revenue 8.5% to ¥9.2 billion (US$81.7 million) for the year ended 30 June 2017. Okura operates 18 pachinko halls of which 12 are in the Kyushu region, four in the Kanto region and one each in the Kansai and Chugoku regions.

Pointing to recent amendments to pachinko machine regulations implemented by the National Public Safety Commission, Okura said that these “significant threats” also present consolidation opportunities for larger market players.

“For instance, any further enforcement of the Amended Voluntary Regulations and the constantly changing market trends and customer preference on machine types and playing costs are likely to demand that pachinko hall operators replace machines more frequently and strategically,” it said. “The expenses in relation to machine replacement are burdensome for Small-sized Pachinko Hall Operators as most of these halls do not have the financial resources to enable frequent machine replacement.

“Thus the pachinko industry remains relatively favorable for Mid-sized Pachinko Hall Operators and Large-sized Pachinko Hall Operators as they may further develop their business by absorbing the market share of Small- sized Pachinko Hall Operators.

“We are optimistic that we can continue to tap into the potential acquisition opportunities of Small-sized Pachinko Hall Operators to achieve economies of scale in operations. Furthermore, as long as our management remains responsive to the changes and flexible in adjusting our strategies to ensure our operations remain efficient and the mix of machines types in each of our halls remain optimal for each operating location, the directors reasonably believe that we can operate and expand our business sustainably notwithstanding the continued contraction of the pachinko industry and the competition with other forms of entertainment in Japan.

“Building on our key strengths, we aim to continue to strengthen our market position and further expand our business by strategically expanding our pachinko hall operations through establishing new or acquiring pachinko halls and to enhance our appeal to the younger population, a significant source of revenue to our group.”

The enforcement of Amended Voluntary Regulations in 2016 effectively banned 138 types of pachinko machines and resulted in 700,000 units being withdrawn from the market. The National Public Safety Commission subsequently issued its “Draft Regulations to Amend Partially Regulations on the Entertainment and Amusement Trades Rationalizing Act and Regulations on Certifying Machines and Conducting Type Test on Machines” in August 2017 which will further limit the payout ability of pachinko and pachislot machines.





What's new

“Gambling frenzy” a potential danger for Japan problem gaming policy: expert

“Gambling frenzy” a potential danger for Japan problem gaming policy: expert A global expert on responsible gambling policy has warned that Japan risks inducing dangerous player behaviors, including a potential “gambling frenzy,” if it implements responsible gambling measures based on fear rather than fact. Speaking at the third and final day of the MGS Summit at this y... Friday, 17 November 2017 07:15

New direction, new ambition as IGT sets its sights on Asia

New direction, new ambition as IGT sets its sights on Asia By Ben Blaschke IGT Managing Director Asia-Pacific, Andrew Hely, says the company is well placed to significantly increase its Asian representation following a corporate restructure that has “re-empowered” the region. The global gaming giant unveiled a series of titles at this week’s MGS Ent... Friday, 17 November 2017 07:12

MGS panel clash highlights difficulty in promoting Japan IR message

MGS panel clash highlights difficulty in promoting Japan IR message The difficulties faced by the Japanese government, operators and stakeholders in educating the public on the benefits of integrated resorts were laid bare on Thursday as an off-the-cuff comment by a Japan gaming expert brought a strong rebuke from Aristocrat Managing Director Asia-Pacific, Chris Row... Friday, 17 November 2017 07:08

Wynn Resorts loses bid to avoid Okada ouster trial

Wynn Resorts loses bid to avoid Okada ouster trial Wynn Resorts Ltd and its former board member Kazuo Okada are officially heading to court next year after a Nevada judge threw out the company’s bid to avoid a trial over the forced redemption of his stock at a US$900 million discount in 2012. Wynn Resorts had argued that a July ruling in Nevada... Friday, 17 November 2017 07:07

Current Issue

Guiding light

Guiding light Mr Jay Chun, Chairman of MGS Entertainment Show organizer the Macau Gaming Equipment Manufacturers Association (MGEMA), discusses the birth of the MGEMA and how it plans to help shape Macau’s future ahead of the 5th anniversary of MGS. By Ben Blaschke       Ben Blaschke: The MGS Entertainm... Thursday, 26 October 2017 15:35

Macau satellite casinos: the more the merrier?

Macau satellite casinos: the more the merrier? MdME’s Rui Pinto Proença looks at the recent flurry of satellite casinos entering the Macau market and their apparent flouting of the “2008 Moratorium.”  By Rui Pinto Proenç As we enter the final stretch of 2017, it is clear that Macau will end the year with no additions to its portfolio ... Thursday, 26 October 2017 15:33

NOkada Manila

NOkada Manila Japan’s Universal Entertainment ousted founder Kazuo Okada earlier this year, prompting questions about the future of the integrated resort bearing his name and the company’s Japan casino ambitions. By Muhammad Cohen | Editor-at-Large After years of controversy, it all seemed to be coming toge... Thursday, 26 October 2017 15:31

Macau city brand strategy

Macau city brand strategy Professor Glenn McCartney explains the importance of developing a unique city brand strategy and why it can help Macau achieve true diversification when it comes to tourist appeal. By Professor Glenn McCartney The brand strategy of a city – from its vision and goals to the level of engagement wi... Thursday, 26 October 2017 15:27