Did You Know Gambling Is Now Legal in Japan?

Steve Myatt
April 25, 2023
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Japan is among the most populated countries in the world, with 125 million people. Japan’s whole population comprises 98.5 percent of Japanese people. Japan is a highly developed country, and it is the world’s second-largest in terms of developed economy. Japan is known for retaining cultural beliefs and practices.

The most exciting fact is that most forms of gambling are illegal in Japan, according to the Criminal Code chapter 23. However, some exceptions include horse racing and some motor sports. In Japan, when a person is found guilty of gambling, the act’s consequences are punishment.

The Japanese government passed a law in 2018 for a plan to open some casinos. In this article, we’ll look into a brief history of gambling in Japan and the future expectations of gambling concerning their economy and society.

The History of Gambling in Japan

It all started in the 8th century when Emperor Tenme enjoyed playing a dice game called ban-sugoroku (double sixes), similar to backgammon. The game was banned after Empress Jito succeeded to the throne.

During this period, professional gamblers known as bakuto emerged and sparked violence. In the 19th century, the officials created nine laws to prohibit gambling. The urge to eliminate gambling didn’t succeed due to the lack of restrictions for the higher class in society.

Petty gambling was legalized in 1718, contributing to the popularity of games like chobo-ichi and zanmai, a popular card game incomparable to blackjack.

However, gambling stopped on April 24, 1907, after enforcing the Japanese Criminal Code 23 (Act No. 45). Any person found gambling was to be punished by paying a fine of JPY 500,000 or even serving a jail term.

Despite the strict laws enacted, Pachinko and Mahjong are among the most popular gambling games ever played.

In 1920 during the World War II period, Pachinko was introduced. It is still a popular game in Japan, with over 7.2 million users.

Mahjong was introduced to Japan in 1924 by a soldier named Saburo Hirayama. Until now, Mahjong has been the most popular table game in Japan. It has an estimated 7.6 million players.

The Recent Legalization of Casinos in Japan

A judge's verdict hammer to show gambling is now legal in Japan

After enforcing the Penal Code law, gambling activities run by private sectors have been rendered as a criminal act. In 2016 and 2018, the Integrated Resorts (IR) Implementation Act was legislated. Casino operators were expected to obtain a license from the government to be decriminalized.

From the massive visits of tourists, Japan would generate approximately $40 billion annually. The law aims to improve visits of tourists to casinos. Still, it allows a maximum of three places in Japan to develop casinos to avoid problem gambling and other issues.

Legalizing casinos in Japan may have benefits and drawbacks to its economy. Here are some benefits Japan will have from legalizing gambling:

Job opportunities for locals

Legalizing casinos in Japan would create job opportunities for locals in various sectors, such as hospitality, tourism, gaming, and entertainment. For casinos to operate, they would need skilled, semi-skilled, and manual workers. Architects, engineers, and construction workers would get employment in the construction industry.

Increased tax revenue

The Japanese government could collect more revenue from the licensing fees charged to casino entrepreneurs.

The Japanese government could tax gamblers, and the casino’s working staff. The Japanese government can additionally collect V.A.T and sales taxes.

Development of the tourism industry

Casinos offer tourist attractions in many countries. Consequently, international tourists who are enthusiasts of gambling would be attracted. International visitors may extend their stay in the casinos for recreational purposes, thus increasing their expenses. Foreign investors can develop infrastructure, such as hotels and malls.

There are benefits to legalizing casinos in Japan, but there are also potential risks and challenges. Here are some of the drawbacks of legalizing casinos in Japan:

Social Related Problems

Gambling addiction is a significant concern. Problem gambling may lead to financial problems, unstable relationships, and psychological health issues. Gambling could also negatively impact an individual, leading to decreased productivity and job loss.

Gambling can lead to mental health problems such as stress, anxiety, depression, and substance abuse. There may be increased crimes such as money laundering, fraud, and theft.

Negative Economic Impact

The presence of casinos may lead to problem gambling and addiction, causing financial strain on individuals and families. Excessive gambling can lead to an increase in debts and economic instability. Additionally, due to concerns that foreign investors will profit from the casinos, most revenue will leave the country.

The amount of money required to be invested in the construction and maintenance of the casinos is too high and may not generate sufficient returns to offset the costs. Furthermore, the legalization of casinos could lead to the decline of the existing gambling industry, such as the pachinko parlors, resulting in unemployment.

Increased Corruption and Mobsterism

The gambling industry has been known to attract organized crime due to its high profits and opportunities for money laundering. Criminals exploit casino regulations and licensing processes, increasing corruption and illegal activities.

An example of an organized crime group is the yakuza. The yakuza crime group has existed for the last 300 years. Legalizing casinos may allow them to organize their operations further. In addition, the presence of organized crime groups may discourage potential investors and visitors.

The First Casino in Japan

poker cards to show gambling is now legal in Japan

Japan’s first casino will be established in the western city of Osaka in 2029. A 5.3 million-square-foot (49ha) will include the casino, hotel, convention center, commercial center, and archive.

A total of $13.5 billion (JPY1.8tn) will be invested in the casino, MGM, a US casino operator, and Orix Group, a local partner, each owning a 40% stake in the business. In comparison, local companies such as Kansai Electric and West Japan Rail will hold the remaining 20%. The casino’s establishment will significantly impact the local area’s infrastructure.

The resort is expected to generate JPY520bn revenue annually from the casino. It is expected to draw six million international tourists and 14 million local visitors.

The Future of Gambling in Japan

From the legalization of casinos and the expected establishment of integrated resorts, Japan’s future in the gambling industry is promising. Even though there are no licensed online casinos in Japan, legal games such as Pachinko and horse racing prove the Japanese’s love for gambling.

Once casinos have been successfully established within the Japanese market, the government may make a step to regulate and license self-owned online casinos, which will massively generate revenue that will benefit the country.

However, the government should consider the effects of gambling, such as problem gambling and related social problems, and ensure the development of regulations to provide a safe environment and responsible gambling.

Final Remarks

It’s true! Gambling has been rendered illegal in Japan since 1907. But sports betting, horse racing, and some motorsports were an exception.

Despite the enacted laws, Pachinko and Mahjong have been popular since. In 2018, an integration resort law was enacted to open casino opportunities in Japan.

Although the first casino is yet to be opened in Japan, the benefits are encouraging. The benefits will have a significant impact on the economy of Japan. Although the endless benefits casinos would have, there are also other drawbacks. The Japanese government should prioritize measures to promote responsible gambling and a safe environment to maximize benefits.

Last updated on May 16th, 2023 at 06:31 am

Author Steve Myatt

Steve is the founder of Gamblers Cafe. He came up with the idea in 2022 and has been providing insights found herein. Having been in the gambling industry for over 5 years, he uses this opportunity to make the industry safe by assessing casinos and recommending the best ones.