Japan: Casino promotion legislation submitted

By Koji Ishikawa, Lawrence Gregory Carter, and Keitaro Uzawa

Currently, gaming is generally banned in Japan. There are a few limited exceptions to the ban on gambling with respect to government-managed sports betting in horseracing, speedboat racing, bicycle racing and motorcycle racing and government sanctioned lotteries.  Pachinko, which is a type of quasi-slot machine and vertical pinball-like game, is also permitted.  Casino gaming, including online gaming, has been strictly prohibited in Japan.  Since the earthquake and tsunami in 2011, there have been serious discussions regarding legalising casinos in order to boost the Japanese economy and as a way to raise money for reconstruction.

A group of lawmakers called the Lawmaker Alliance for the Promotion of Integrated Resorts (the “Alliance”), prepared a draft bill promoting integrated resorts (i.e., resorts that include a casino) (the “IR Promotion Bill”) in 2011.  However, the IR Promotion Bill languished and was not submitted to the national diet for a very long time.[1]  Support for the IR Promotion Bill has increased since Tokyo was chosen as the host city for the 2020 Olympic/Paralympic Games on 8 September 2013.  As a result, the IR Promotion Bill was submitted to the national diet on 5 December 2013 with several minor changes from the original IR Promotion Bill.

Overview of the IR Promotion Bill

Legalising casinos would require not only legislation to create an exception to the existing law that prohibits casino gaming but also a new governmental organisation called the Casino Control Committee. 

The basic regulatory frameworks stated in the IR Promotion Bill are as follows:

  • A casino must be operated by a licensed private (non-governmental) operator only in restricted areas which are to be designated by the state upon the application from local governments. 
  • The importers and manufactures of gaming machines, systems and tools used in a casino and the service providers in casino facilities need to be licensed as well. 
  • The Casino Control Committee will regulate the casino business and supervise casino operators, including examination of license applications.
  • A licensed casino operator must pay a levy to the state and local government, and the governments also may collect entrance fees from the visitors.

The IR Promotion Bill does not provide any specific requirements for licensing and a concrete regulatory framework is to be provided in another separate act (the “IR Development Act”), which is scheduled to be approved one year after the enactment of the IR Promotion Bill.

Future Prospects

The legalisation of casinos is sometimes referred to as “Casinomics”, the forth growth strategy of current regime.  Several local governors are very enthusiastic and wish to create gambling/casino districts in their prefectures.  The Alliance has about 150 members from across the political spectrum, and current Prime Minister, Shinzo Abe, is an honorary chairman of the Alliance.  Thus it appears highly likely that the IR Promotion Bill will move forward.

Although there appears to be strong support now, given the fact that the IR Promotion Bill is short on specifics, including the criteria that will be considered when granting a casino operator license, the bill could be controversial.  It has been reported that discussions regarding the IR Promotion Bill in the national diet will start from next January and it is estimated that the Bill will be approved in 2014

[1] A version of a casino bill was submitted to the national diet by a small opposition party.  However it was reported that current ruling party lawmakers wished to withdraw the bill and submit another version of a casino bill.