Okura Holdings to close two pachinko venues due to poor performance
Okura Holdings Limited has announced the closure of two of its pachinko halls, K’s Plaza Mikatsuki in Saga prefecture and BA Motosumiyoshi in Kanagawa. The two venues will cease operations from 10 May 2021.
According to the released statement, the company decided to close the venues due to “deteriorating operating and financial performance; since the outbreak of the Covid-19 in Japan in January 2020 and the resulting significant decline in overall customer traffic.”
Okura Holdings has said that while the company’s other pachinko halls show signs of recovery and returning players, the two properties in question have not managed to recover their guest traffic since the latter half of 2020.
The company aims to focus on more promising venues and strengthen their performance, but due to the high competition in the pachinko industry, Okura Holdings will be closing the underperforming properties.
Net revenue from K’s Mikatsuki for the six months ended 31 December 2020 was JPY33.8m ($310,409), which contributed approximately 1% to the company’s revenue. However, the property recorded JPY14.7m in loss before taxation for the period, and it amounted to 40% contributed to the group.
BA Motosumiyoshi earned JPY30.3m in revenue and lost JPY7.9m, a 22% contribution to the company’s losses. The company believes that the closures will have no material adverse impact on its business operation and financial position.
Currently, pachinko parlors are one of the few legal ways to gamble in Japan; however, since the start of the pandemic and the health and safety regulations that were imposed in the country, venues are facing difficulties.
While some pachinko parlors remain operational even with the social-distancing rules, the pachinko market is facing a slow decline, both due to its lack of digitalisation and planned IRs in the country, which would introduce casinos into the Japanese market.
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