Gambling News by Gambling Headquarters

Gambling at pachinko was a lot more fun for Reiko Kuzuhara before she started wondering whether maybe -- just maybe -- her losses were helping North Korea build nuclear weapons. Pachinko, a form of pinball deeply loved in Japan, is an industry run by ethnic Koreans, and experts have long believed that the revenues are a vital source of hard currency for the impoverished regime in Pyongyang. Now, as North Korean leader Kim Jong Il's nuclear weapons program gathers pace, Japan's attitude is hardening, and that includes shutting out the ferry on which the gambling money is believed to be hand-carried from Japan to North Korea. "I really don't like that the money I spend could be helping them with those sorts of things," said Kuzuhara, 55, who works in the printing industry and was interviewed on a Tokyo street near several pachinko parlors. "It's making me think twice and cut back on how often I play." The pachinko connection is facing increased scrutiny as tensions rise following North Korea's ballistic missile tests in July and its first test of a nuclear device on Oct. 9. Pachinko is an upright pinball game played at tens of thousands of brightly lit parlors across the country. Success is measured in little steel payoff balls, which can be exchanged for cash or other prizes. The machines are believed to rake in more than 27 trillion yen a year, some of which finds its way to North Korea. Official figures put the sum of remittances to North Korea from sources in Japan at 3 billion yen in fiscal 2005, more than 90 percent of which was hand-delivered. But the bookkeeping is murky and some think the real sum could be as high as to 10 billion yen. No one knows how much of it derives directly from pachinko and how much from another major source of income for North Korea in Japan -- imported methamphetamines.

"It's very difficult to say how much cash is actually going from Japan to the North," said Toshio Miyatsuka, a specialist on North Korea at Yamanashi Gakuin University in central Japan who has written a book about the pachinko industry.

"But it does seem certain that a lot of it is winding up in the hands of the North Korean government and military, and that includes money earned from drugs and pachinko," he added.

The Ministry of Finance requires reports for large sums of money going to the North, but only for 300 million yen or more for wire transfers and 10 million yen or more for money delivered in person.

With much of the money going to North Korea hand-delivered, the banning of the Mangyongbong ferry from Japanese ports in July has almost certainly put a crimp in the cash flow.

Government officials, however, say it's hard to track money delivered through third countries, in person or through bank accounts. Cash from the drug trade traveling through Japan's underworld is likewise hard to monitor.

For the pachinko industry, however, North Korea's image problems and the sanctions have not been a business issue, officials say.

While ethnic Koreans may worry about how relatives in the North are faring without the cash they used to take to them, their main concerns as businessmen lie elsewhere.

"Yes, there are a lot of ethnic Korean operators, but the industry is not at all concerned about the sanctions issue," said Takaaki Sasaki, spokesman for Zennichiyuren, an industry organization. "We're not hearing about anyone losing business because of the missiles or the nuclear test."

Still, the connection between pinball revenues and North Korea makes some Japanese pachinko players uneasy.