Japan’s House of Representatives passed a bill on Tuesday to tighten regulations on illegal online gambling.
The revised law prohibits the operation of online casinos and websites promoting illegal platforms. Social media platforms are also urged to remove illegal gambling content. Violators may face fines up to ¥500,000 ($3500) or imprisonment for repeat offenders.
The revised law is expected to be enacted during the current parliamentary session by June 22.
Japan casino market
The bill comes in the wake of a police report that estimated over 3 million people in Japan engage in online casino gambling, spending ¥1.24 trillion ($8.4 billion) a year.
Online casinos operate in a gray area, with many users accessing offshore platforms or sweepstakes casinos. Sweepstakes operate in much the same way as pachinko and slots, which are popular in the country.
Pachinko, a game that resembles pinball, allows users to bypass gambling laws by buying balls to play on the machines. Users can then win balls by hitting jackpots, but instead of directly exchanging balls for cash, they exchange the balls for prizes. Players must then go to another business nearby to exchange the prizes back into cash.
In 2023, pachinko machines generated ¥8.2 trillion ($53.1 billion), while pachislot machines brought in ¥7.5 trillion ($48.6 billion). Despite declining in popularity in recent years, the pachinko industry still represents a significant portion of Japan’s economy, accounting for about 3.14% of the country’s GDP.
Japan’s younger generation tends to play online games rather than go to the pachinko parlors, mostly frequented by the country’s aging population. The recent police report detailed that the majority of online gamblers are men in their 20s and 30s, with daily wagers commonly ranging from ¥5,000 to ¥30,000 ($200).
Clamping down on bettors as well as operators
While most countries target operators, Japanese police also arrested an individual for illegal online gambling last week. Makoto Chomabayashi, a 38-year-old man, is accused of wagering 90 million yen ($625,500), mainly on baccarat, on the casino site Stake between August 2022 and April this year.
Chomabayashi commented, “News reports said there were hundreds of thousands of players in Japan, so I thought I was only the tip of the iceberg.”
The Fukushima resident had been posting images of his gambling wins on X, and investigators suspect he may have gambled as much as 28 billion yen ($190 million) online.
MGM begins construction of first casino resort
The country has also given the green light to construct its first land-based casino. MGM Resorts is working with Japanese company, Orix Corp, to construct a super casino in Osaka Bay and began construction on the ¥1.27 trillion ($8.8 billion) project in April this year.
The resort is expected to open in autumn 2030 and generate annual revenues of around ¥520 billion ($3.6 billion). The government is also considering plans to open similar casino resorts in Tokyo and the northern island of Hokkaido.
Plans to open the country up to casinos have faced public opposition, but as the country struggles with a declining economy, the increased tax revenue and boost to tourism could prove essential.
Offshore sports betting also thriving
As well as unregulated casinos attracting users in high numbers, offshore sportsbooks are popular in the country due to stricter regulations around sports betting. Japan allows certain forms of gambling on sports, but mainly restricts this to on-site at horse racing tracks, boat racing venues, and cycle tracks.
In 2024, an estimated ¥6.45 trillion ($45 billion) was wagered on unregulated overseas sports betting platforms.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
