Japanese gambling operators should brace themselves for an even greater pachinko tightening in the coming years as integrated resorts (IR) is likely to become a reality.

International brokerage Union Gaming made the warning this week as it gave Japanese pachinko hall operator Dynam Japan Holdings Co. Ltd. a “hold” despite the firm’s better-than-expected revenue for the first half of fiscal 2018.

Union Gaming believes that the government is now moving to draw a line between pachinko – also known as amusement – and the potential upcoming integrated resorts industry.

“The fact that the regulatory body is tightening games again suggests there is an internal government view that the IR bill will become a reality – hence the widening gulf between pachinko and casino gambling regulations,” Union Gaming analyst Grant Govertsen said. “Further, we would expect even greater pachinko tightening in the out years if IRs become a reality.”