Gambling Is Allowed in Japan

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Japanese opposition and the lower house on July 20 have finally shaken hands on the legalization of gambling resorts!

The long-awaited bill, which had been under consideration for over 2 years, was eventually enacted on July 20; finally marking the end of a serious disagreement between the cabinet of Prime Minister of Japan and the upper house.

Prime Minister Shinzo Abe, an avid supporter of the enacted legislation, had been facing a lot of hostility on the part of the opposition since December 6, 2016, when the bill was first introduced. The opposition party expressed concerns about that the problem of addiction might arise in Japan once gambling is legalized. And according to numerous polls, the authorization of gambling resorts wasn’t supported by most of the Japanese either; with over 60% of residents opposing it!

As stated by the law, casinos in Japan should be built as part of resorts; which usually include such facilities as hotel rooms, restaurants, and different forms of entertainment.

The Ins and Outs of the Gambling Law

Casino resorts are expected to be established in 3 Japanese cities. The most probable candidates to receive gambling licenses are such popular destinations among foreigners as Osaka, Tokyo, and Yokohama. The licenses will allow the integrated resorts to operate for 10 years, after which the licenses can be extended; provided that the casinos make sure to re-apply to the local governments, of course!

The law entails a restriction on the amount of gaming space that can be allocated to a resort. Any casino facility should occupy 3% or less of the total resort area, while the rest of the space is allocated for rooms, bars, restaurants, conference halls, etc.

The law limits Japanese individuals to visit the resorts no more than three times per week, or ten times per month while charging them an entrance fee of 6,000 Yen ($52). This limitation must be part of the conditions imposed by the opposition, aimed at preventing the Japanese from developing a gambling addiction. International guests, in turn, are not subjected to either of the restrictions.

Casino Operators from Abroad or Local Volunteers?

The Asian gambling market has shown some rapid increases in revenue lately, even though such prospective gambling “Giants” as India and Japan have yet to build their first legitimate land-based casino. In search of expansion and income, foreign gambling operators have long since kept a close eye on some Asian countries, hoping for the eventual legalization of gambling. Japan is currently opening up, and gambling operators in other countries are rubbing their hands with excitement.

The prominent US operators MGM Resorts International, WMS Industries, and Ceasars Entertainment Corporation are willing to set up their branches in Japan. But they are not the only players currently pursuing their hopes of entering this exciting new market. Actually, some operators from Macau and Japan express a desire to build the resorts as well!

Gambling Benefits For Japan

The authorization of gambling in Japan shouldn’t come as a surprise, as this had actually been a serious prospect for a long time before the bill was finally introduced in 2016. One of the first forms of gambling emerged back in 1930 with the Pachinko game (a kind of slot machine). Pachinko parlors are so popular in Japan that they generate more gambling revenue than all the games in Las Vegas, Singapore, and Macau combined. The Japanese are also dedicated lottery players: every year they spend on lottery tickets about 900 billion Yen ($7.9 billion) on average.

However, Pachinko and lottery intakes have significantly decreased in recent years. As for the latter, the revenue has been going down since 2005 (when it was as high as $9.6 billion); while the Pachinko market revenue has steadily been falling off since 2013 (when it peaked at $40.4 billion). The Japanese seem to be losing interest in Pachinko and the lottery!

But as it’s one of the most lucrative industries out there, the legalization of gambling does augur well for the economy of Japan. Integrated resorts should draw many Japanese residents, even though they are limited to 3 visits a week and 10 per month. This will be a completely new gambling experience for them, as compared with the lottery and Japanese gambling machines.

However, the main revenue is expected to come from overseas residents. Tourism brings about $30 billion to the Japanese budget yearly, and this number is set to boom with the appearance of the first brick-and-mortar casino.

Online Gambling in Japan

With the government debt increasing steadily year by year, Japan really needs some additional revenue. It’s unlikely that these integrated resorts will be capable of fully tackling the country’s deficit, so there must be some other sources of income. What about online gambling?

Online gambling in Japan exists, but only as a form of betting on J1 League (Japan Professional Football league) and public sports (horse racing, bicycle racing, powerboat racing, and asphalt speedway motorcycle racing). There is only a limited number of events where betting is allowed; in addition to this, Toto holds a monopoly on all such bets.

However, the Toto’s monopoly is only a formal restriction; whereas in actual practice, the lion’s share of wagers go beyond the confines of Japan. There is no strict law that would forbid the Japanese to use overseas bookmakers, and this does creates a gap in the domestic budget.

The final decision is up to the government. Online gambling in Japan can be either completely forbidden or allowed. However, given the legalization of the integrated resorts and the need for a substantial increase in revenues, it is highly likely that the Japanese will be able to legally play in online casinos in the near future.