Japan’s government battles the spread of iGaming and seeks casinos. By Eugene Gerden
Japan is considering new measures for the development of the domestic gambling sector in years. This comes in a move to accelerate the fight with online illegal casinos. The administration also seeks to create conditions for the building of new gambling facilities in various prefectures across the country.
As for online casinos, the problem remains very pressing for Japan at present. The number of their users has significantly increased in recent years, and these figures continue to grow.
A Yen for Gambling
According to earlier data provided by Noriko Tanaka, official representative of the Japanese Association for Considering Gambling Addiction, official sales from online casinos, are said to be $7.7 billion, or approximately 1.1 trillion yen. This makes Japan the fourth-largest country in the world in terms of online-casino sales, only after those states which allow online-gambling activities.
In fact, the spread of online casinos in Japan has begun during the Covid-19 pandemic. According to data of the SimilarWeb Japan digital-analysis company, since that time the number of gamblers increased five- to sixfold or even higher.
As a rule, most online casinos in Japan are operated by overseas operators, and Japanese domestic law does not allow for their direct enforcement. In recent years many local users, however have been arrested, which resulted in their fines of up to 500,000 yen, as well as prison sentence of up to three years in case of habitual gambling.
Not Enough?
Yumiko Tamura, a well-known Japanese researcher in gambling-addiction prevention and social psychology has recently spoken out on the adoption of additional measures to fight with illegal gambling activities in Japan. These, he feelsshould be considered as one of the priority areas by the state at present. That would require the adoption of new, efficient legislation in this field. In addition, legal gambling activities also must become the subject of greater attention from the state.
Tamura comments, “Currently the existing forms of gambling, such as pachinko and pachislot, have an annual market size of approximately 20 trillion yen, while appropriate regulations and addiction prevention measures have been insufficient. Responsible gambling legislation is expected to bring great benefits to society as a whole.”
Tamura added that, currently, Japan’s gambling-addiction rate is five times higher than the average for developed countries. According to her data, the percentage of people suspected of gambling addiction in Japan is about 10 percent, which is significantly higher than the average of two percent in other major countries. In this regard, the adoption of new legislative measures in this field by the state is considered by some as an acute need.
Remedial Measures
In the meantime, the Japanese government is aware of the existing problems and considering ways of solving them. That would involve the introduction of an admission-fee system for casino access; the imposition of a system of limiting entry based on the individual or his family's report, as well as other measures. At the same time, monitoring of capital flows will also be strengthened. Anti-money laundering measures will include mandatory identity verification for large cash transactions and the introduction of a suspicious-transaction-reporting system.
Particular attention will be also paid for strengthening regulations with regard to the pachinko and pachislot industries. The pachinko industry, which has been a gray area as of now, has now been clearly positioned as a target for measures to combat gambling addiction. Stronger restrictions on payouts, on business hours and on the installation of ATMs are being implemented in stages. In fact pachinko, a uniquely Japanese culture, plays a major role in the country’s social life, with announced sales of 14.6 trillion yen for fiscal year 2024.
Enter Casinos
As part of governmental plans, these systems have already proven effective in Singapore and Australia,
and similar results are expected in Japan. In the meantime, the present government also puts its hopes on the development of legal gambling activities in the country. These involve the development of the so-called integrated resorts.
As part of state plans, successful implementation will allow casinos to generate large-scale economic effects, primarily in the tourism industry. Currently, more than 10 prefectures are considering attracting casinos, while the central government expects that regional competition will continue to intensify.
It is estimated that a single IR facility will directly employ several thousand people, with tens of thousands workers in the case of related industries.
There are also high expectations for tax revenue. A special tax system for casino revenues will be introduced. At the same time, part of these tax revenues will be used to combat addiction and improve local welfare.
One of the largest such facilities will soon be opened in Osaka. The new resort IR will be operated as MGM Osaka and preparations for its launch are already underway. The Osaka resort will occupy approximately 49.2 hectares north of the Osaka Kansai Expo site, with a total floor area of approximately 780,000 square meters.
*** This exclusive article by Eugene Gerden was originally published in Casino Life February 2025 Edition of Casino Life Magazine Issue 185 Volume 22***
