Why there are no casinos in Japan

With the gambling industry worldwide witnessing a considerable growth in recent years, we examine the sector in Japan and the relative lack of casinos in the country

Japan maintains a complex relationship with gambling. As in many parts of the world, there remains a keen audience for reels or other types of casino games — both online and in brick-and-mortar gaming establishments. The law, however, prohibits all forms of gambling except horse racing, pachinko and a few other games.

This discrepancy may be explained by the simple fact that while the government and local authorities regulate gambling, to appease citizens there are some exceptions, as discussed above, that the law allows. 

In recent years, Japanese authorities have taken steps to lifting the prohibition on gambling in light of the potential benefits this may bring to the country’s tourism industry, leading to the creation of so-called “Integrated Resorts”.

To learn more about Integrated Resorts and the legal reasons for a lack of casinos in elsewhere in Japan, continue reading below.

The legal framework

Even though gambling is illegal in Japan as per the Penal Code, Chapter 23, Article 185, the gambling industry in Japan is booming, with pachinko bringing around ¥16.03 trillion in revenue

According to the Japanese Penal Code (Art. 185-187), every person that enters a gambling establishment or participates in betting is subject to a fine of ¥500,000. Those that run an establishment dedicated to this type of entertainment are subject to imprisonment of no less than three months, and no more than five years. 

Under these current laws, Japanese people may only place bets on activities that provide “monetary amusement”, or are regulated with separate laws. These include:

  • Horse racing
  • Motorcycle racing
  • Powerboat racing
  • Bicycle racing
  • Lottery
  • Pachinko

However, even for these permitted gaming activities, the provider must hold a license that is issued by the government or the relevant authorities. In terms of monetary amusement, the Supreme Court of Japan has ruled that cash does not fall under this category, implying a low-value amount is seen as unlikely to encourage gambling. 

Defining gambling

According to a Tokyo High Court ruling made on 28 November 2006, gambling is defined as “an act where more than two persons bet on an outcome of a contest of chance to contend for a prize in the form of property or asset.” This is in relation to a case dating back to 1911, where the Old Supreme Court found that the “outcome of a contest of chance” essentially refers to a win in a game that entails any level of chance, even if some skill is involved. In layman's terms, if any game requires luck, then it is illegal in the eyes of Japanese law.

Consequently, all following court rulings have established precedents deeming games such as mah-jong, igo and shogi (Japanese chess) illegal.

Online offshore gaming

Like land-based casinos, online gaming sites are illegal in Japan. As such, many Japanese players use offshore sites to engage in this activity. In 2013, Japan’s National Diet — the country’s parliament — addressed online gambling, regarding it as illegal. Namely, it stated that if a Japanese citizen takes part in any online gambling activity, even if the provider operates outside of Japan, they will be prosecuted as per the existent gambling laws (the Penal Code).

Current status

Since 2006, the issue of gambling in Japan has been present and discussed amongst country officials, leading to the Liberal Democratic Party (LDP), alongside a cross-party group (The Alliance), submitting a bill to the National Diet in 2013 requesting the legalisation of casinos. 

Three years later, the bill passed, though it was not until July 2018 that the Act for Development of Specified Complex Tourist Facilities Areas was entered into law. Under this framework, gambling may be considered legal if operated by a licensed private entity, and can only take place in certain locations in Japan. 

These bodies are called “Complex Tourist Facilities Areas”, also known as “Integrated Resorts” (IRs). 

Establishing IRs

The Act stipulates that in order to be qualified as such, IRs must meet certain requirements and are, interestingly, required to build a casino facility.

The size of these facilities was not initially clearly stated. However, the Enforcement Order from 2019 declares that IR casinos should total less than 3% of resort’s overall floor area. Additionally, the Act limits the timeframe of the license to three years, after which a renewal is required.

Japanese citizens will be asked to pay an entry fee of around ¥6,000, and are limited in the number of times they can enter and exit the facility. This does not apply to foreign citizens.

Final thoughts

With the recent reforms, the Japanese gaming industry is poised for extraordinary changes. Currently, Osaka, Nagasaki and Wakayama are the three provinces where IRs will be established. We can state with some confidence, therefore, that we are witnessing the start of Japan's gambling entertainment boom as the country embraces further legalisation of the betting industry.  

Disclaimer: Play responsibly. For help, visit www.rgf.org.mt. Players must be over 18