| BUSINESSWEEK ONLINE : NOVEMBER 13, 2000 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN BUSINESS
Japanese Racetracks Are Fading in the Stretch (int'l edition) And governments are suffering from lost gambling revenue Kazu Yoshitaka is no stranger to gambling. For the past decade, the 29-year-old restaurateur has regularly driven more than an hour to the Tokyo Racecourse west of the city to plunk down as much as $300 a day on the nags. But unlike his student days, when he visited weekly and bet on every race, Yoshitaka now comes only one Sunday a month, with his wife and child in tow, and only bets on the last few races. ''My wife gets in a bad mood when I lose,'' he says. Yoshitaka isn't the only one cutting back in gambling-mad Japan. Attendance at race tracks from Tokyo to Hokkaido has been falling steadily since the early 1990s because more and more of the people who gamble are out of work, have taken a pay cut, or are simply too old. Revenue at most tracks has fallen in seven of the past eight years and likely will dip again this year (chart). While Japanese gamblers bet $38 billion on the horses last year--three times as much as their U.S. counterparts--a quarter of the nonprofit associations that run the tracks are in the red. This is bad news for the government, which regulates racing and collects hundreds of millions of dollars from the horse-racing associations. The central government gets 10% of the gate at the 10 national courses run by the Japan Racing Assn., while local administrations get 22.5% from tracks in their districts. The decline in gambling revenue comes when both the national and local governments are strapped for funds. Having long reaped the rewards of gambling, the authorities are now under pressure to keep the ailing tracks going. With so many in trouble, one might think politicians would shut them down. Yet only the bravest are considering that because the tracks employ so many voters. Indeed, the Tokyo Racecourse--home to the Japan Derby--employs some 5,000 people on race days. Women in white gloves and green uniforms run the elevators, and armies of grandmas in pink bonnets fix divots on the track. Local shops, railways, and bus companies also benefit. Says Kunji Okue, an economist at Dresdner Kleinwort Benson in Tokyo: ''Politically, gambling is untouchable.'' GEEZER DAY. Eager to get attendance up, tracks are trying various enticements. The JRA, for example, spent $100 million on advertising in the 1990s to lure women to the races. The strategy worked--sort of. Women now make up 12% of the attendance at JRA racetracks--up from 7% in the 1980s. ''In the old days, the track was filled with old geezers with pencils in their ears,'' says Akiyoshi Takumori, an analyst at Sakura Securities who tracks the impact of sports on the economy. ''Now, it's stylish to go even if you don't bet.'' But the surge in attendance by women hasn't stopped the slide in betting, because men are less likely to gamble away their paychecks if their wives or girlfriends are there--and women rarely go alone. Despite the Catch-22, the JRA continues to spend heavily to beautify its tracks. Tokyo Racecourse is in the midst of a seven-year face-lift--a boondoggle if ever there was one because the facility is already luxurious. Precise figures are hard to come by because the semi-public JRA doesn't publish its budget. But Mikio Horigome, an adviser to the JRA, estimates that the association will spend some $500 million to rebuild parts of the Tokyo track, and the other nine courses will be fixed in turn. Local gambling associations, which also run bicycle, speedboat, and auto races, don't have that luxury. Finances are so bad in Hyogo Prefecture that the operators of bike races there plan to fire their staff and hire them back with a 50% wage cut next fiscal year. The Nishinomiya Koshien Bike Racing Enterprise says if it doesn't turn a profit by fiscal 2002, it will shut its bicycle tracks. With the Nikkei down and the tracks in hock, the only good bet these days is that there is more trouble ahead. By Ken Belson in Tokyo _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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