Casino and gambling in Japan

Japan is one of the most developed and disciplined countries in the world, where gambling has long been considered socially undesirable.

However, changing economic and tourism priorities have led to a gradual liberalization of gambling legislation.

Today, the Japanese gambling market is one of the largest in Asia in terms of turnover, although legally many forms of entertainment are still in the "gray zone."

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History and legal status

The main law governing gambling is the Japanese Penal Code (Article 185), which prohibits participation and organization of gambling.

However, there are a number of exceptions approved by the state:

• horse racing, cycling and motorcycle racing bets;
• lotteries (Takarakuji);
• Pachinko slot machines (de facto gambling, but classified as "recreational").

Everything else, including online casinos, poker, roulette and Internet slots, remains banned.

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Permitted forms of gambling

1. Pachinko is a national craze

Pachinko is a special form of slot machines that combines pinball and slot elements.

Officially, these machines are classified as entertainment devices rather than gambling, thus circumventing the ban.

Players win not money, but metal balls that can be exchanged for prizes.

Prizes are then exchanged for money at nearby "independent exchange offices" not formally linked to the hall - a legal loophole that has existed for decades.

According to 2024 estimates:

• there are more than 7,000 Pachinko halls in Japan;
• annual turnover - about ¥14 trillion ($90 billion);
• the industry employs over 300,000 people.

Thus, Pachinko provides up to 4% of the country's GDP, remaining the largest gambling market in Asia in terms of revenue.

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2. Lotteries (Takarakuji)

State lotteries have existed since 1945 and are regulated by the Department of the Interior and Communications.

Tickets are sold through banks and official kiosks, as well as online.

Lottery revenues are directed to social projects, infrastructure and disaster relief.

3. Sports betting (Public Sports)

Only allowed for four sports:

• horse racing (Keiba);
• bicycle racing (Keirin);
• moto races (Auto Race);
• boat races (Kyotei).

These types of bets are organized under the control of the state and local authorities.

There is also a "toto" platform where you can place legal bets on J-League football matches.

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Casinos and Integrated Resorts (IR) Act

For a long time, Japan completely banned casinos, but the situation changed with the adoption of the Integrated Resort Promotion Law in 2016 and the subsequent IR Implementation Act (2018).

The goal of the reform is to attract foreign investment and develop tourism.

IR (Integrated Resorts) are multifunctional complexes that include hotels, exhibition halls and casino zones licensed by the state.

Key provisions of the IR Act:

• casinos are only allowed inside licensed resorts;
• the minimum age of a player is 20 years;
• Japanese citizens pay an entrance fee of ¥6,000 per visit;
• foreigners enter free of charge;
• there are limits on the number of visits (3 times a week, 10 times a month);
• all operations are overseen by the Casino Regulatory Commission.

First IR projects

1. Osaka IR (MGM Resorts + Orix Group) - opening scheduled for 2030, project cost - $10 billion.

2. Nagasaki IR (Casinos Austria International) - under approval, expected to launch after 2028.

These resorts will be the first legal casinos in Japanese history.

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Online gambling

Online casinos are officially banned in Japan.

The Act on Punishment of Organized Crimes (1999) and amendments to the Criminal Code equate organizing or participating in online gambling with illegal activity, even if the server is located abroad.

However, Japanese users actively visit foreign sites with licenses from Curacao, Malta and the UK using VPNs and cryptocurrency.

Formally, such actions are illegal, but punishments for individual players are rarely applied - the authorities concentrate on the prosecution of operators.

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Taxation

Before the legalization of IR casinos, the state receives income from lotteries and sports betting.

After the launch of the casino, the tax model will be as follows:

IR revenues will be directed to national and regional budgets to fund infrastructure, health and tourism.

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Control and Responsible Gaming

The Casino Regulatory Commission (CRC), established in 2020, is responsible for regulating the industry.

Its functions:

• issuance and revocation of licenses;
• controlling transactions and countering money laundering;
• prevention of ludomania;
• compliance with international AML and FATF standards.

Responsible Gaming includes:

• strict identification of players;
• deposit and playing time limits;
• state hotlines for addicts;
• the possibility of self-exclusion (Self-ban).

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Economic importance

Gambling generates huge indirect revenues for Japan, despite a partial ban:

• Pachinko's annual turnover exceeds $80-90 billion;
• sports betting and lotteries - about $10 billion more;
• projected IR casino revenue is $15-20 billion per year after 2030.

Japan expects that integrated resorts will attract up to 20 million foreign tourists annually and create up to 100,000 jobs.

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Development prospects

For 2025-2035, it is planned:

1. Launch of the first IR casinos in Osaka and Nagasaki.

2. Possible license expansion to Tokyo and Hokkaido.

3. Introduction of digital lotteries and bets through official applications.

4. Increased control over offshore online casinos.

5. Integration of IR tourism with cultural and business events.

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Japan is a country where gambling falls between tradition and modernization.

On the one hand, the government tightly controls gambling, on the other, it recognizes its potential for tourism and the economy.

Pachinko and lotteries remain a cultural phenomenon, and IR casinos should usher in a new era of legal gambling.

At the same time, online casinos and private gambling remain strictly prohibited, which makes the Japanese market both closed and promising.

Japan is slowly but surely transforming from a country of bans to a regulated and technological center for responsible gambling in Asia.