Pachinko problems loom large as Japan kicks off casino debate

TOKYO, June 18 Wed Jun 18, 2014 5:42am EDT

TOKYO, June 18 (Reuters) - Japanese lawmakers backing a bill to legalize casinos acknowledged on Wednesday that little had been done to address gambling addiction associated with the homegrown pachinko industry, highlighting one of the key obstacles standing in the way of the bill's passage.

In the first day of debate in parliament, opposition lawmakers grilled casino proponents about what steps would be taken to avoid exacerbating social problems such as addiction, personal bankruptcies and organized crime.

Opposition lawmakers pointed out that such problems are already serious issues in Japan due largely to the pinball-like game of pachinko, which is played by one in six Japanese and generates $200 billion in gross wagers each year.

The government's failure to address problems associated with gambling is expected to be one of the main talking points for opposition lawmakers eager to derail a bill that could give birth to the world's third-biggest gambling market after the United States and Macau.

Global companies including Las Vegas Sands Corp, Melco Crown Entertainment Ltd, Wynn Resorts Ltd and MGM Resorts International are vying to win the first licences to operate casinos in Japan, a market that brokerage CLSA estimates could generate annual revenue of $40 billion.

"We strongly believe that not enough has been done in terms of studying and addressing gambling addiction," Takeshi Iwaya, a member of the ruling Liberal Democratic Party and a key casino proponent, told a lower house committee handling the bill.

Critics say the way pachinko is regulated - it is not legally considered gambling and is overseen by the police as a leisure activity - has led to a lack of awareness of related social costs.

Iwaya said the plan was to use some casino-generated revenues to fund a system to deal with addiction problems, which in addition to pachinko could stem from gambling on soccer and horse, boat and cycle races run by the state.

Keiji Furuya, chairman of a national public safety commission which has oversight over the police, told the lower house committee that the police didn't have "an accurate grasp" on the number of pachinko addicts in Japan.

Instead Furuya cited data from a non-profit organization that had received requests for help with pachinko-related gambling problems from a little over 2,300 people last year.

An official from the health ministry told the lower house committee about a study it conducted in 2010 of 4,123 respondents in which 9.6 percent of males and 1.6 percent of females were found to be gambling addicts.

While taken from a small sample, that compares with 1.4 percent in the United States and less than 1 percent in Britain, the health ministry official said.

With no more time left for discussions in the current session of parliament ending on June 22, the lower house committee will carry the bill over into an extraordinary session of parliament expected later in the year, lawmakers have said. (Reporting by Nathan Layne; Editing by Matt Driskill)