Is It Illegal To Gamble In Japan?

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Anyone who has visited a pachinko parlor in Japan might be surprised to learn that gambling is technically illegal.

The question of whether or not gambling is illegal in Japan is not black and white. Officially, most forms of gambling have been illegal in Japan for many years (refer to Chapter 23 of the Japanese Criminal Code for the exact wording of the law) – but there have been ways and means for thrill-seekers to get their (above board or otherwise) adrenaline fix in Japan since then. New laws passed in 2016 have indicated a bright future for potential casinos in Japan – though they have yet to officially open their doors.

Let’s have a look at the history of gambling in Japan, and how that has led us to today’s gambling culture in the Land of the Rising Sun.

History of Gambling in Japan

The history of gambling in Japan is a long one. Records from as early as 720 AD tell stories of aristocrats playing hakugi (a Chinese dice game) for clothes. At this time, gambling was a pastime of the privileged and was often heavily influenced by trends from China.

Origins of Gambling In Japan

Go was a Chinese board game that became popular in Japan during Nara period. This was used for gambling purposes – an illustration from the time shows an emperor playing Go to decide to whom he will offer his daughter’s hand in marriage. Sugoroku was a backgammon style game that was also extremely popular amongst gamblers during this period – evidence suggests this game was periodically banned, but we can only hypothesize as to why this might be.

Parlour games that drew on participants’ knowledge of trivia and verse were increasingly used as fodder for gambling throughout the Heian period – cementing the image of gambling as a pastime of the educated upper class.

Moving on to the Edo period, strict laws were put in place to illegalize gambling in Japan. Exceptions were made within the laws for professional gamblers – known as bakuchiuchi. These prohibitive policies had the effect of pushing gambling underground amongst ordinary citizens – paving the way for the illegal casinos that would eventually be opened by the Yakuza.

A defined split emerged between the gambling habits of the upper classes and the lower classes – gambling amongst the upper classes was a civilized hobby where people gambled possessions that they could afford to lose, whilst amongst the lower classes the stakes were much higher. Gambling was often a blood sport amongst the lower classes, where a “win or die” stake was common. Again, we can see the later Yakuza philosophies beginning to emerge here.

Gambling During The 19-20th Century

The lottery system emerged during the Edo Period, but was illegal. In the Meiji period, the lottery was legalized and became a popular way of gambling. It was illegalized again in the 1840s. Also in the Meiji period, games such as darts and billiards began to emerge on the gambling scene. Shogi and Hanafuda, which are still popular games in Japan today, also have their roots in the Meiji period.

During the Second World War, when the Japanese economy was severely damaged, the government cracked down hard on gambling. However, the influence of American soldiers introduced even more games and gambling techniques to Japan. The underground gambling scene began flourishing more than ever in the post-war years in Japan.

Interestingly, the Japanese government also legalized the lottery at the same time as cracking down on gambling – in 1937, the lottery (which had been an underground pastime since the 1840s) could be played above board again under the Temporary Funds Adjustment Act. The funds generated by the lottery were used to support the Japanese war effort.

Pachinko, Japan’s most popular gambling game, gained popularity in the post-war years. It was used to gamble for black market items, such as soap. Pachinko is legal in Japan.

Efforts to fully legalize gambling in Japan took on a new lease of life in the 1980s, when political parties such as the Liberal Democratic Party made a case for how casinos could benefit the economy. These suggestions were largely rejected for fear of problem gambling emerging amongst Japanese people.

Now And The Future Of Gambling In Japan

In December 2016 the Integrated Resort Promotion Law was passed, permitting the creation of “integrated resorts” in Japan – meaning large-scale hotels that incorporate casino facilities. These will be largely aimed at tourists – entry is to be free for international visitors, but Japanese residents are to be charged entrance fees and limited to a set amount of weekly visits. Following this, a bill legalizing casinos was approved by Japanese lawmakers in 2018.

The introduction of integrated resorts in Singapore has seen a growth in tourism and the overall economy, and Japan hopes to follow the same model. There were initially great hopes for the first of these integrated resorts to be opened in time for the Tokyo 2020 Olympic Games – however, this timeline proved not to be realistic. Japan’s gambling future under the new regulations remains to be seen.

Why is Gambling Illegal?

Gambling is closely associated with the actions of the yakuza (consider the split between the actions of professional and civilian gamblers throughout history) and as such it is an activity that is widely frowned upon by Japanese citizens. Tattoos are widely frowned upon in Japan because of their links to yakuza culture – gambling is a similar principle.

There are also widespread fears of a “problem gambling” mentality developing across Japan – the addictive nature of gambling is taught to Japanese children from a young age.

Japanese Gambling Games

Pachinko

Pachinko is perhaps the most famous Japanese game, and is legal to play in Japan. It is a slot-cum-pinball game, played by an estimated one in six Japanese citizens. It is a solitary game, played in parlors that are widely present across Japan (in 2002, there were 17,000 pachinko parlors in Japan). This lucrative industry brings approximately $200 billion dollars to the Japanese economy each year – which is most likely the reason it enjoys its legal loophole in the country’s otherwise stringent anti-gambling laws.

Another reason pachinko enjoys this special status is the fact that players don’t directly win money – there’s a bit of a process involved for cashing in on winnings. The advertised prizes in pachinko parlors are gifts like perfume or soft toys. However, there are also “special prizes” – objects of little monetary value, which you take into a separate building and exchange for the cash you are owed from your winnings.

The potential loss of pachinko machines is only $2 per minute – which is tiny when compared to other gambling games. The largest possible jackpot is $50 – again, minuscule when you think about the winnings in a casino in Las Vegas. This is perhaps another reason that Japanese law makes an exception for pachinko – and indeed the reason it hasn’t caught on in other countries.

Pachinko parlors in Japan attract huge crowds of regulars – shockingly, it is estimated that 2–3 Japanese children die of dehydration every year while waiting in cars for their parents to leave pachinko parlors.

Plans to introduce new casino-style gambling venues with a wide variety of games could spell trouble for the pachinko industry – will devotees stay loyal to the game, or head to where the potential winnings are far greater?

Lottery

The Japanese lottery (takarakuji) has been regulated by the Japanese Lottery Association since 1964. The money generated by lottery sales go to prefectural governments. There are no legal age limits on those who can participate in the lottery – but only Japanese residents can claim prizes.

Under the umbrella of takarakuji, there are three main lottery games. The first is scratch cards – available to buy at lottery booths across Japan. The second is selected numbers, where the customer chooses their lottery numbers in advance of a draw. The third is unique numbers, where the customer is issued with a generated lottery number in advance of a draw.

Lottery sales have been in decline since 2017 – largely attributed to the lack of interest amongst the younger generations. To incentivize ticket purchase, convenient options such as purchasing online have been introduced.

Public Sports

There are four public sports that you can legally bet on in Japan – horse racing, bicycle racing, motorcycle racing, and boat racing. Only pari-mutuel betting is permitted – you can’t bet on fixed odds or make in-play wagers. You can place these bets both online and in person. It’s worth noting that many foreign gambling sites will allow you to make illegal bets on Japanese games – but you can be punished for going through with these bets under Japanese law.

Soccer Pools

It is legal to bet on the J-League soccer pools in Japan – an activity known as Soccer Toto. This lottery-style system was introduced in 2001 and proved hugely popular in Japan. Profits of Soccer Toto are put towards the promotion of sport and health across the country, via the National Agency for the Advancement of Sport & Health.

Japan Casino Locations

On foot of the new legislation, Japan intends to grant a maximum of three licenses to integrated casinos across the country. The location and details of these are yet to be confirmed.

Osaka officials and MGM (the world-famous Vegas casino chain) have been working together to submit plans for an integrated resort in Osaka. The chain’s huge financial losses due to the COVID-19 pandemic may affect this partnership – with experts projecting that the size of the proposed resort will have to be dramatically scaled down.

Wakayama prefecture intends to submit plans for a casino on Marina City – an artificial island off the coast of Wakayama Bay. Nagasaki is also a proposed casino location.

The legal restrictions being placed on casinos in Japan have proved prohibitive for many once interested parties. For example, Hokkaido announced in 2019 that they would not be further pursuing their bid for one of the casino licenses – this location was previously thought to be a front runner. Many casino companies who were once interested in pursuing the licenses have also withdrawn – including Las Vegas Sands Corp and Caesars Entertainment Corp.

Amongst the unfavorable conditions are a proposed 30% tax on profits, a five-year license renewal clause, and a limit on casino floor space. In addition, polls indicate that the majority of Japanese citizens (64.8%) oppose the relaxation of gambling laws – leading to concern around public protests and crime.

The Japanese government intends to release more details on the casino plans in July 2020, which is the deadline for the final draft of the National Basic Policy – this will hopefully give the world some more definitive answers about what the future of gambling will look like in Japan.

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