Risk of Revisions to Legal Regulations Governing Pachinko Halls

「Pachinko halls, which are customers of our group, are directly subject to regulations under the Act on Control and Improvement of Amusement Business, the Basic Act on Measures to Prevent Gambling and Other Addictions, rules of the National Public Safety Commission and prefectural ordinances, among others. A permit or notification of use is required to use card units.」

「At pachinko halls, which are our group's main customers, we expect the decline in appetite for capital investment to continue due to uncertainty over the outlook resulting from the removal of machines subject to the former regulations following regulatory amendments and the spread of infectious diseases, and anticipate that a full-fledged recovery will take time.」

「In addition, our subsidiary 日本ゲームカード株式会社 is registered as a Type III prepaid payment instrument issuer under the Payment Services Act and issues pachinko prepaid cards. Future amendments to the law could affect the business results and financial condition of our group.」

「At pachinko halls, restraint on purchases of peripheral equipment continued amid an uncertain outlook, as halls replaced gaming machines in response to amendments to the regulations and considered measures to prevent excessive involvement associated with the IR Promotion Act, as well as measures to prevent passive smoking.」

「At pachinko halls, restraint on purchases of peripheral equipment continued amid an uncertain outlook, as halls replaced gaming machines in response to amendments to the regulations and considered measures to prevent excessive involvement associated with the IR Promotion Act, as well as measures to prevent passive smoking.」

「The outlook remains uncertain due to consideration of measures to prevent excessive involvement under the IR Promotion Act and amendments to and enforcement of the Enforcement Regulations of the Act on Control and Improvement of Amusement Business and other rules.」

「Pachinko halls, which are customers of our group, are directly subject to regulations under the Act on Control and Improvement of Amusement Business, the Basic Act on Measures to Prevent Gambling and Other Addictions, rules of the National Public Safety Commission and prefectural ordinances, among others. A permit or notification of use is required to use card units.」

「The operating environment at pachinko halls, which are customers of our group, is on a contractionary trend due to tighter regulations, including the amendments to the Enforcement Regulations of the Act on Control and Improvement of Amusement Business that came into force in February 2018 and the Basic Act on Measures to Prevent Gambling and Other Addictions that came into force in July 2018,」

「Pachinko fans continue to decline as entertainment diversifies against the backdrop of the spread of the internet and smartphones, amid the impact of amendments to the Enforcement Regulations of the Act on Control and Improvement of Amusement Business and other rules that came into force this year, and the Basic Act on Measures to Prevent Gambling and Other Addictions. The situation therefore remains challenging. At the same time, the entrenchment of low-denomination play and the spread of gaming machines with reduced gambling appeal in line with the amended Enforcement Regulations of the Act on Control and Improvement of Amusement Business and other rules are expected to help prevent excessive involvement, which is a social need.」

「At pachinko halls, which are our group's main customers, the operating environment remains challenging, with uncertainty over the impact of amendments to the enforcement regulations of the Amusement Business Act that took effect in February this year and developments concerning the proposed Basic Act on Measures to Prevent Gambling and Other Addictions (Note 1), as well as declining pachinko participation due to the diversification of leisure activities and the established prevalence of low-denomination play.」

「Amendments to the Act on Control and Improvement of Amusement Business came into force in February 2018. As the market and regulatory environment for the gaming industry undergo major changes, the player population is continuing to decline due to the diversification of entertainment and the spread of low-denomination play, making our group's operating environment increasingly challenging.」

「We believe that the market has continued to contract due to ① tighter regulations on highly gambling-oriented gaming machines, ② customer attrition caused by the rise of mobile games and other offerings against the backdrop of widespread smartphone use, and ③ declining consumer spending per visit accompanying the increase in low-denomination play venues.」

「We recognise that uncertainty about the outlook continues, as the Rules Partially Amending the Enforcement Regulations of the Act on Control and Improvement of Amusement Business and the Rules on the Certification and Type Testing of Gaming Machines, among others, have been promulgated from the perspective of measures to address gambling and other addictions following the enforcement of the Act on Promotion of Development of Specified Integrated Resort Districts (IR Promotion Act).」

「Overall, we recognise that uncertainty about the outlook continues, due to the decline in the pachinko-playing population resulting from the diversification of entertainment, the entrenchment of low-denomination play, and consideration of measures to address gambling addiction following the enactment at the end of last year of the Act on Promotion of Development of Specified Integrated Resort Districts (IR Promotion Act).」

「The pachinko industry faces a decline in the pachinko-playing population due to the diversification of entertainment and other factors, the entrenchment of low-denomination play, new gaming machine regulations, the removal of highly gambling-oriented machines and the replacement of machines with new-standard models. In addition, further gaming machine regulations are planned as measures to prevent excessive involvement, leaving pachinko halls in an operating environment that is more challenging than anything they have experienced before.」

「In the pachinko industry, which is the destination for our group's sales, the operating environment for pachinko halls remains challenging as they face declining pachinko participation due to the diversification of leisure activities, the established prevalence of low-denomination play, new gaming machine regulations and the issue of removing highly prize-oriented machines. We expect these severe conditions to continue for the time being.」

「The operating environment for pachinko halls remains challenging due to the sluggish popularity of pachinko and pachislot, the entrenchment of low-denomination play, measures to address the consumption tax increase, and the replacement of highly gambling-oriented machines following new gaming machine regulations.」

「Accordingly, if various laws and regulations are amended, sales and installation of card units and other equipment at pachinko halls may be commercially affected, which could affect the business results and financial condition of our group.」