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Casinos Given Green Light in Japan

On December 15th 2016, the National Diet officially opened Japan’s doors to Casino gambling by passing the ‘Integrated Resort Promotion Act’, which lays the groundwork for the legalization of Casinos in Japan. If the process continues smoothly, casinos will be operating in Japan after the 2020 Tokyo Olympics.

Current Status of Gambling Regulations in Japan

Gambling has generally been prohibited in Japan subject to several exceptions including government-managed sports betting on horseracing, speedboat racing, bicycle racing and motorcycle racing as well as government-sanctioned lotteries. Pachinko, which resembles a mix between pinball and slot machine games, has traditionally been the most popular form of gambling in Japan although it has operated in a legal grey area as it is not specifically recognized as a legal form of gambling.

In order to change Japanese attitudes towards Casino gambling, a group of lawmakers called the Lawmaker Alliance for the Promotion of Integrated Resorts first prepared a draft bill to promote the introduction of casino-integrated resorts in 2011, but it did not receive popular support. However, after Tokyo was awarded the 2020 Olympic/Paralympic Game, the bill gained momentum and has received new life as Komeito (one of the coalition parties of the ruling LDP) has reversed its position regarding Casino gambling. This shift has paved the way for passage in the National Diet, provided that additional measures are implemented to limit the number of integrated resorts and reduce gambling addiction in Japan.

Brief Overview of the Bill

The Integrated Resort Promotion Act provides preliminary guidance for the development of implementing legislation and basic framework for the Casino industry in Japan. Notably, the Act specifies that Casinos will be limited to certain geographic areas as selected by the government to promote tourism, contribute to local economies, and establish Japan as a premier sightseeing destination.

In addition to the requirement for implementing legislation, the Act establishes a new governmental organization named the Casino Control Committee to grant Casino licenses and provide regulatory oversight for the Casino industry in Japan. The Committee will set regulations on gaming machines, systems, and tools manufactured and imported for use in the Casinos and otherwise monitor compliance.

Looking Ahead

The Act does not provide any specific requirements for licensing and a more detailed regulatory regime will be provided in another law, which must be enacted by next year. It should further be noted that the Integrated Resorts Promotion Act only legalizes licensed private onshore casinos and will not legalize other forms of gambling such as Pachinko and online casinos. With the expected opening of Japan’s casinos shortly after 2020, Japan is well positioned to sustain the economic momentum and tourism influx that will be generated by the Olympics.