Pachinko to benefit from IR delay

The negative outcome of Tokyo’s local election for the IR bill could end up being a relief for Japan’s pachinko industry.

Japan.- The recent election for the prefecture-level parliament of Tokyo that took place on Sunday saw the Liberal Democratic Party (LDP) losing nearly two-thirds of its seats in the member assembly. The result could delay the IR bill untill after the election year in 2018 but, according to Union Gaming, it could turn out as a relief for the pachinko industry in Japan.

“With this in mind we believe the Tokyo defeat for the LDP, and by implication a weaker outlook for the LDP nationally, will make it incrementally tougher for PM Abe to push through his agenda, including the very contentious IR issue,” Union Gaming said, as quoted by AGBrief.

The brokerage believes that the pachinko industry could benefit from an IR-bill delay as it has experienced a decline due to the NPA “continuously stiffening regulations”. The gaming bill has taken “center stage” and Union Gaming thinks that it has put additional pressure on the NPA to make pachinko more restrictive.

“In the now-more-likely event that the IR bill doesn’t come to fruition this year (and possibly next year too) due to the LDP’s political fortunes, we would view this as a positive for the pachinko industry as it could result in a regulatory reprieve,” the analysts said.

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