“The Amendment to the Entertainment Business Regulation Law Is a Failure”… On the Contrary, Adult Entertainment Establishments Are Crying Out Over Skyrocketing Scouting Fees—A “Reality We Cannot Ignore”

The Lament of Adult Entertainment Establishments After the Law Was Amended

“Since the law was amended, they should crack down on this properly. What on earth is the police doing?”

complains an executive of a major adult entertainment group with locations nationwide.

More than a year has passed since the amended Adult Entertainment Business Act went into effect at the end of June last year, but voices from within the industry are saying, “The amendment was a failure.”

Not only has the intended effect of “cleaning up the industry”—the stated purpose of the amendment—failed to materialize, but the situation has actually worsened compared to before the amendment, making the situation even more dire. Some have even gone so far as to call it “the worst law of the century.” The reason cited for this deterioration is the “ban on scout commissions” introduced by the amendment. It is said that this has produced the “exact opposite effect.”

“Scout fees” refer to the compensation paid by adult entertainment establishments to recruiters for introducing women to them. In recent years, it became a social issue when women—burdened with massive debts due to predatory “romance-based sales tactics” by unscrupulous host club employees—were funneled into adult entertainment establishments through recruiters and subjected to ongoing exploitation. In response, the Adult Entertainment Business Act was amended to eliminate transactions between recruiters and adult entertainment establishments.

Among adult entertainment scouting groups are “Natural” and “Access,” which have been specifically identified as “anonymous, fluid criminal groups” (Tokuryu), and the police have been intensifying their crackdown on them.

The ban on “scout commissions” was intended to eradicate the flow of funds to unscrupulous scouting groups by cracking down on adult entertainment establishments. However, reports indicate that the amount of scout commissions flowing to these groups is actually increasing.

Adult Entertainment Establishments That Continue to Pay “Scout Fees”

Following the legal revisions, traditional scouting agencies—not affiliated with Tokuryu—stopped referring women to adult entertainment establishments. With a series of raids on adult entertainment establishments linked to scouting agencies, it appeared to the public that the revisions had been effective. However, the reality is different.

“ Tokuryu recruiters, who flout the law, have become the primary source of women for adult entertainment establishments, and new business deals are on the rise. Since adult entertainment establishments cannot operate without a steady supply of women, they have no choice but to rely on Tokuryu. A situation that should never have arisen has taken hold. In Tokyo, a majority of establishments—and in Osaka, nearly all establishments except for the two major groups—continue to do business with Tokuryu,” said an executive at a major adult entertainment group (as mentioned earlier).

Despite being prohibited by law, the reason so many adult entertainment establishments continue to pay scouting commissions is simply that they “aren’t getting caught.”For both adult entertainment establishments and Tokuryu, the cases of raids and arrests following the legal revision represent only the “tip of the iceberg.” Most involve the rare occurrence of “reports filed by sex workers employed at the establishments.” The fact that scouting commissions are cash transactions, making it difficult to trace the flow of funds—such as payment records—also complicates enforcement efforts.

Tokuryu, which has rapidly expanded its “market share,” has been increasingly demanding additional scouting commissions under the guise of “advisory fees,” and some adult entertainment establishments are beginning to cave in to the pressure.

“The expansion of Tokuryu, which continues its malicious recruiting practices, is inevitable, and it will drive out adult entertainment establishments that are running their businesses honestly.”

“In a few more years, most of the adult entertainment establishments’ profits will flow to Tokuryu and be used for criminal purposes,”

Industry insiders are expressing these concerns.

Why Adult Entertainment Establishments Value Scouts

“There are significant benefits for adult entertainment establishments in working with recruiters. Through them, women interested in working in the industry can learn about the business and the nature of the work, and for these women, recruiters are easier to confide in than the establishments themselves. They help alleviate the women’s anxieties,” said a local adult entertainment establishment owner.

Using scouts saves the establishment the trouble of posting job listings or directly recruiting women. Furthermore, scouts also highlight the women’s strengths to the establishment on their behalf.

“The biggest benefit is that they ‘introduce high-caliber women.’ If we have more staff members who get a lot of bookings, sales naturally improve. Having high-caliber staff featured in advertisements can also help attract more customers. If we cut ties with scouts, the opposite happens: high-caliber women stop joining, and sales decline,” says the manager of a well-known escort service group that operates multiple locations.

At the establishment managed by this manager, the scouting commission is 30,000 to 50,000 yen per woman per month. For top performers, this can sometimes reach around 100,000 yen per month. Payments continue indefinitely as long as the woman remains on the roster.

“In the past, the standard rate for scouting commissions was roughly 15 percent of a woman’s monthly sales. However, in recent years, it has skyrocketed to nearly 20 percent. Since a shop will go out of business without a steady supply of women, most establishments likely feel they have ‘no choice but to rely on scouts.’ “In some cases, adult entertainment establishments also use the same secret apps that Tokuryu’s members use,” said an executive at a consulting firm specializing in the adult entertainment industry.

To eliminate unscrupulous recruitment practices

Following the legal amendment, Tokuryu has seen its profits from “scout commissions” paid by adult entertainment establishments increase significantly.Adult entertainment establishments that continue to pay scouting commissions—which have become illegal—attract women who can earn money through Tokuryu’s scouting groups, leading to an increase in their client base. As a result, customers are drawn to illegal establishments, creating a cycle in which the amount of scouting commissions flowing from these illegal businesses to Tokuryu also increases.

How can we eradicate “scout commissions,” which persist even after being banned by law?

“We need to actively crack down on adult entertainment establishments that pay scouting commissions,” said the manager of a well-known escort service group mentioned earlier.

“We should strengthen penalties and increase the number of prosecutions against recruiters to create a stronger deterrent against scouting activities,” said the owner of a regional adult entertainment establishment mentioned earlier.

“There is also the idea of imposing penalties not only on recruiters and establishments but also on women who secured employment through Tokuryu. This would be possible by amending relevant laws and regulations,” said a staff member of an industry association.

Within the adult entertainment industry, there is now a strong demand to “establish a system whereby establishments that seek to comply with the law can secure a continuous and stable supply of personnel from sources other than illegal organizations.”