Japan is Betting High on Casinos for Economic Growth


After Japanese Prime Minister Shinzo Abe and Tokyo’s parliament body authorized the building of integrated resorts which is to include casinos two years ago the decision was met with mixed views from the Japanese citizens. The thought process behind the idea was to improve tourism and to help improve the countries economy.

Prohibition against operating casinos in Japan dates all the way back to 1880 and the policy was based on the traditional Japanese values of hard work and duty. The laws are so strict that even Japanese cruise ships are not allowed to operate casinos even whilst in international waters. Lotteries and betting on boat, horse and bicycle racing are already legal in Japan and the industry turn over equates to around five trillion yen per year. Other illegal gambling is largely run by the Yakuza, Japans version of the mafia. The Gambling market within Asia is largely made up by Hong Kong, Macau and Singapore and Japan are looking for a slice of the action. Bookmakers are really excited as japan aiming to open the casinos by 2025 and locations such as Nagasaki, Osaka, Wakayama and Tokyo have all been suggested but as of, yet nothing has been confirmed. The national government will select the locations based on recommendations from local authorities. The blueprint was to be provided by US gaming and bookmaker giants such as Las Vegas Sands and MGM Resorts. However, since then we have found out that Las Vegas Sands have now pulled out of a deal due to the economic decline damaged by Covid-19.

The Pros and Cons

The biggest benefits of creating casinos for the government and the economy are that it creates jobs and it also offers tax revenues. However, many of the Japanese citizens have argued that crime rate and problem gambling resulting in debt and mental health issues will rise.

However, the Japanese government have stuck to the positive facts that countries that have casinos have around eight percent higher employment rate than those without and it does appear to drive wages higher in those countries also. If we also look at the tax benefits although legalized gambling provides a very small proportion of tax receipts it can help parliament to avoid spending cuts or increasing other taxes. The Daiwa Institute of Research states that the casinos could generate nearly two billion dollars per year which would have a major positive impact on the economy. Others would argue that it could also have a negative effect if problem gambling where to arise rapidly. A study in Australia shows that the social cost of gambling in Victoria almost matches the revenue and tax that it generates. On the other hand, research also shows that whilst problem gambling does increase for a short period of time initially this does level off over time. There has been safeguards put in place to prevent such problems also by limiting the number of times Japanese citizens can visit a casino as well as a high entrance fee. There is no entrance fee for foreigners as the idea is to help with tourism as they try to double the number of tourists to around twenty million per year. In 2019 the Japanese government also announced an action plan for ‘The Addictions of Gambling and so forth’. This was to show that the government was trying to minimize gambling problems and to win the Japanese public around. There is also a notion that Casinos help boost local retail sales by attracting visitors from outside the local area. Although this case has also been argued that if the majority of the casinos clientele is locals then it will have a negative impact as they will be spending there time and money in the casino rather than the local shops. However as previously mentioned the idea of the resorts is to lure tourists in, in which case would mean that it would drive retail sales up. Although again on the flip side of this if the casinos are based within resorts it is likely that they will have restaurants and shops and that the tourists will not actually need to use the local facilities.

The Conclusion

To summarize whether you are for or against the idea of legalizing casinos in Japan it is certainly an exciting time to see how things develop and play out. It has been a long and painful slog to get things to where they are today and were sure that there will be plenty more twists and turns to come in the coming days, weeks, months and even years.


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