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High Stakes for Japan: The New Casino Bill Explained

The government recently approved a bill to legalize casinos in Japan after years of debate. Here's a brief lowdown of what you need to know.

By 5 min read

On December 15th 2016, to the sound of applause, walkouts, and reportedly some tears, Japan passed a bill which paved the way for casinos to become legal within the country. These casinos would be integrated parts of specialized mega resorts, following the model of Singapore, as opposed to standalone gambling establishments. It’s estimated that, thanks to the country’s large population and high income (per capita), the industry could one day generate a whopping US$25 billion annually. At the same time, the bill has received remarkably low public support. So what’s it all about?

Untapped potential

For years, Abe and the Liberal Democratic Party (LDP) have been looking to bring casinos to Japan – enthralled by the untapped economic potential they could bring. Much of the inspiration came from looking across the waters to Macau and Singapore, who have seen their casinos filled with (mostly) high-rolling Chinese tourists generating billions of dollars in gambling revenue. The bill has outlaid plans for creating casinos within large complexes that would act as holiday resorts, with hotels and additional amenities such as spas or shopping malls.

Although casinos currently don’t exist within Japan, forms of gambling seep through the cracks in some shape or another. While gambling is technically illegal in Japan, exceptions mean that people are allowed to bet on government-regulated boat, horse and bike races. There are also the dazzling lights of the famous Pachinko parlors on every corner of town’s and cities. These exist within a legal grey area (prizes that are won can be exchanged for real money in another location). Pachinko alone still manages to rake in an estimated ¥21 trillion annually. If you’re interested in experiencing it for yourself, have a read of this article.

With the painstaking process of licensing, additional laws, construction (including trying to find as many blinding lights as possible to put outside), plus choosing a cute mascot, casinos probably won’t see the light of day until after 2020.

A controversial hand

The topic of casinos has been debated in Japan for nearly two decades, and this time around it came with a host of controversies – and not the fun kind.

The actual passing of the bill lasted less time than an episode of The Simpsons (15 minutes to be exact), and was marred with walkouts during its debate. Before all of this, Abe had begun to lay the groundwork of its passing, by appointing three pro-casino individuals into high-ranking positions within government.

Outside the walls of government, NHK conducted a survey that found only 12% of those surveyed want casinos to exist within Japan, highlighting the gap between politicians and the public over the subject.

What are the benefits of casinos in Japan?

In addition to fueling my ability to be able to count to 21, there are a host of other high-rolling benefits (see what I did there?!).

The main impact that casinos are expected to have in Japan is a big fat economic one. The Chief Executive of MGM Grand has stated that the company could invest as much as US$10 billion into the casino industry in Japan. The potential flow of money, from tourists and Japanese nationals, as well as the job creation that it would spark, are part of the vanguard to convince people of the benefits. According to Grant Goverston, a gaming analyst based in Macau, “Japan is likely the single largest revenue-and-cash-flow greenfield development opportunity for the foreseeable future.” [1]

However, in the case of casinos, it’s about more than money too. It’s about legacy. Japan is in a position where it must find innovative ways to attract tourists. With casinos on its mind, Japan is focusing special attention on the high-spenders who visit Macau and Singapore.

The country has set itself the feat of reaching 40 million tourists per year by 2020. Although this number will be facilitated by the Olympics, casinos are being seen as a way to secure post-2020 tourism for Japan once the wonderment of the competition has died down.

What are the downsides of casinos in Japan?

The large majority of complaints are centered around fears of gambling addiction, and with Pachinko already gripping the nation, it’s clear to see how that could evolve. In 2014, the Japanese Health Ministry conducted a survey, and found that roughly five million people in Japan suffer from a gambling addiction.

The fear is that the advent of casinos could worsen the illness for many people. Some lawmakers have promised to help ease the discontent of those opposed to the bill, by stating that help will be provided for anybody that needs it. One such individual was Chief Cabinet Secretary Yoshihide Suga, who stated that the government would aim to “[…] develop an environment where treatment such as training for specialized treatment and consultation can be received when necessary.” [2]

A potential hidden benefit of the casino bill is that it might finally shine a light on gambling addiction. According to Noriko Tanaka, the president of The Society Concerned about the Gambling Addiction, although Japan is considered by many as “a gambling superpower”, it is around 10 to 30 years behind other countries in addressing and dealing with the problem of gambling addiction. [3]

Beyond this, fears begin to circulate about the age-old problem of money laundering, and how casinos and the proliferation of gambling may negatively affect local communities.

Regardless of the potential negatives or positives, Japan is set to pave its future with casinos. Just remember the one golden rule: Never bet it all on black. You’ll only be right 50% of the time.


[1] Bloomberg
[2] Reuters
[3] Focusgn

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