What is the reason for Japan not having casinos?

Japan has always tried to work out a unique regulatory system. How banks, financial institutions and gambling facilities are regulated in Japan is not easy to comprehend, especially for those who don’t live in the country and don’t speak the language. The classical form of gambling is banned in Japan, but that does not mean that there are no other forms of games that can be played to try your fortune. Some of those who have been to the country might have seen the large number of Pachinko stores and these are the representative establishments, where Japanese form of gambling takes place. Obviously, you are not allowed to play poker or spin the roulette wheel in these entertainment facilities, but many locals spend hours playing pachinko, because for them this is gambling. So what can you do if you live in Japan and you want to gamble? Has anybody ever proposed plans to build casinos in Japan? I am going to answer these questions in the following article.

Why Japan has no casinos?

Las Vegas needs no introduction to you if you are a gambler. In the early days, the city was reputedly dangerous, mostly because of the underground activities, but this has changed gradually and the local authorities had to work a lot to eradicate criminals from the city. As a result, Las Vegas is a safe destination to travel to and it is also known as the Mecca of gambling.

When entrepreneurs who were ready to operate the casinos in Las Vegas in a legal way, the city underwent a very serious expansion. At the end of the 80`s, several gigantic casino resorts were constructed and Las Vegas became a tier A city for gamblers.

Las Vegas has been a very popular tourist destination for Japanese families, mostly because Japanese men tend to like gambling and the city itself with its excellent infrastructure provides a very convenient environment, which is reassuring for Japanese families.

This does not mean that Las Vegas is the only destination for those who are looking to gamble in real casinos instead of going to old-fashioned Pachinko stores. Well, Las Vegas is far away from Japan, and supposedly not many people in Las Vegas speak Japanese. There are many countries around Japan, where gambling is not banned and if you get on a plane in Tokyo, you can reach these destinations in a few hours. Among these are South-Korea, the Philippines, Singapore and Macau. South-Korea and the Philippines are definitely much closer to Japan than Las Vegas and consumption prices are also lower in these countries. Saipan in the Pacific Ocean is another US territory with gambling options which is closer to Japan than Las Vegas.

Many pro-casino activists in Japan say that, if these countries where gambling is allowed are only a flight away from Japan and if someone who wants to visit real casinos can buy a flight ticket to these countries in a few minutes, then what difference would it make if Japan had casinos too? This is a very strong viewpoint and it is hard to make an argument in this respect.

Japan has always been famous for its safety and most of the tourists visiting the country for the first time are amazed by how everything is organized in Japan. Along with the few souvenirs, people usually take these unique experiences from Japan on the plane and they tell their friends, colleagues and relatives when they get home. As a result, Japan has always been mystified as a super safe country, where social order is impeccable. That is why tourists return to Japan and some even start dreaming of living in Japan. Well, this is not completely irrational, but I think it is better to take everything with a grain of salt. But anyway, no Japanese politician would want to ruin this image and this is understandable.

For the bliss of Japanese gamblers, the idea of constructing an integrated casino resort on the artificial island of Odaiba in Tokyo was proposed by the Japanese politician, Shintaro Ishihara in 1999. His argument was the following: If there is Keirin (motor-paced cycle racing) and horse racing in Japan, then why are real, land-based casinos in Japan still nonexistent? Tokyo is the only megapolis in the world, where classical form of gambling is still banned. Why is that?

His proposal has been rejected, because the regulatory environment was unable to accommodate his idea of a new integrated resort that would have created opportunities for Japanese citizens to gamble in an unrestricted way in Tokyo.

Nevertheless, his proposal was remembered. In the following years the popularity of pachinko seemed to lose momentum and in 2013 the first proposal to build an integrated casino resort in Japan was presented in front of the Japanese House of Representatives(衆議院).

In 3 years, in December 2016, the proposal was accepted by an extraordinary Diet(臨時国会) and in June 2018 Japanese legislators started working on the new plans of an integrated resort.

It’s important to understand the reasons that are obstructing the acceptance of such a proposal. If we set aside the social consequences, such as gambling addiction and the possible appearance of illegal activities surrounding a newly built casino, there is a much more significant issue, that is even more difficult to resolve if one wants to build a land-based casino in Japan with traditional games.

Car racing, horse racing, boat racing in the previously mentioned motor-paced cycle racing along with pachinko are ubiquitous in Japan. There is not a single city without a pachinko store and you can find hundreds of options to gamble in a Japanese way if you live in Japan. The operators of these games can act on a very biased market, where competition is the last thing they want to see. If you have a pachinko store in Japan, you are basically free to set your payout rate and this monopoly is the key factor that is preventing politicians from passing new proposals. These Japanese style gambling options are famous for their insanely high house edge and operating a pachinko store in Japan is still a lucrative option if you know how to do it.

Content: LB

Illustration: pakutaso.com

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