Online Gambling in Japan

In his book Gambling in America, William Norman Thompson points out that despite having a population only half the size of the USA's, the gambling revenue in both countries is actually effectively equal. Although Japan does not have any casinos in the Western sense of the word, the island state contains nearly 20,000 gambling halls offering 'entertainment with prizes,' in addition to a thriving industry supplying gaming machines and a higher gambling rate per capita than America. However, the laws remain extremely strict, with a fine line dividing permitted games of 'skill' from banned luck-based games.

The Legal Landscape

Many laws relating to gambling in Japan date back as far as 1907, when citizens were only legally permitted to bet on certain events, including horse riding and bicycle racing. Motor biking and boat racing were later added to this list to create a total of four 'Public Sports' on which parimutuel betting is permitted. Gambling in a wider sense reaches back even further into Japan’s colourful history, with a form of lottery having existed since the mid-17th Century. Although this was discontinued in 1842, it was re-launched shortly after the end of World War II, in the hope that profits could be used to rebuild a country scarred by the nuclear bombs.

The company that runs the lottery, Toto, is Japan’s only legally licenced online gambling portal - but sports betting is only allowed in the form of football pools on the J-League or on the four public sports. However, despite the government trying to deter its citizens from using foreign bookmakers online, there is no legal framework against it. Many citizens choose to do so, as this offers them a much-expanded range of activities to gamble on.

This in turn has caused the Japanese government to question its own infrastructure, both physically and online. Recent international reports suggest that Japan is considering fully legalising gambling, which would include issuing licences for American-style casinos and online casinos, in order to help tackle its huge debt crisis. In October 2013, the legislative discussions began as to how these plans would take shape. While not set in stone, it seems it will be a question of if, and not when, Japan makes gambling fully legal.

Popular Markets

Sports betting on the permitted activities of horse racing, J-League soccer, motorbike and motorboat racing are all popular with both gamblers and casual viewers, but this is far from the country's only betting activity.

The gambling halls previously mentioned may not offer traditional casino games, but they do provide the wildly popular Pachinko, played on electronic booths and often featured in films set in Japan. Similar to video slots, the gameplay combines arcade video games with a pinball machine-type mechanism. A large number of ball bearings are released on the vertical play wall, which then have to navigate obstacles such as pins. Players are able to capture balls to trigger the release of more, and then exchange them for gifts or cash prizes. Although this is considered a skilled game and so permitted under current laws, there is a fairly crucial element of luck involved, making it more similar to slots games than the government might like to admit.

Finally, the sports betting app also enjoys a strong following in Japan. Although it is theoretically strictly prohibited, gamers are able to download games to their mobile device and win money by playing.

Major Gambling Events

As western casinos are still illegal in Japan, the country has never hosted a major gambling tournament. Should new legislation pass through the government and into law, this will likely change. Global casino brands such as Melco Crown Entertainment have indicated that they would be willing to spend $5 billion building a new casino in Japan, attracted by an already-present fan base just waiting to be permitted to participate. Such an expensive, modern casino would no doubt look to recoup its costs by hosting worldwide tournaments featuring famous, high ranking players to draw in even greater crowds.

The Future of Gambling in Japan

With one of the highest deficits in the modern world, Japan is desperately in need of another source of revenue to aid its financial recovery. Many believe the government will overturn a century’s worth of law to introduce Western-style gambling to the masses in the next few years, paving the way for gambling to become a much more open and inclusive hobby. If licences are successfully granted for physical casinos, the country may well expand this to online casinos as well.