When I was in Japan they were everywhere, and supposedly people who collected the tubs of ball bearings are supposed to "claim" their prize(i.e stuffed bears and the sort), but go behind the builing and there is a shack where people trade in their "stuffed bears" for cash(i.e basically a "fence operation").
As you know, your comments are quite accurate regarding pachinko in Japan and the North Korean connection and how it is essentially legalized gambling.
It is another in a long string of what, in Japan, is on the surface not necessarily what is below the surface in reality. Laws and their actual ENFORCEMENT are much that way over in Japan. Particularly, for example, (not even mentioning prostitution) in Japanese construction where on the surface the domestic criminal law outlaws bid rigging and cartels (so the Japan Foreign Ministry can tell the Americans they are doing everything by the book and all laws are in place), and yet under the surface there is hardly a construction project in Japan that is not rigged with the influence of Yakuza, who also work ferociously to knock out any US competitors that try the hardest and sincerest to get in the market here, to no avail. US free traders who havent worked in the field, then altruistically and naively yell that "American firms over there are crybabies" and "they don't try", when the fact of the matter is due to their blindness they (the well-meaning yet uninitiated) cannot see the surface (everything is in legal harmony) is actually quite completely a odds with what the true, deeper state of things are and what is really going on behind the scenes.
A true dichotomy of theory vs. praxis, of perceptions and realities. Pachinko, prostitution, construction are very good examples.