Japanese Casino Legalization

1. Japan Casino Legalization
2. Japan Casino Legalization

Japan is a target for casino gambling, as it is seen as a great area where, should that activity be legalized, there would be a paradise for those who would be the fastest to take the opportunity and start to develop on pristine grounds. Japanese legislators pass casino legalization measure. Latest Casino and Gambling News, Gaming Law & Legislation, Casino News, Japan. An overview of the Casino legalization movement in Japan. What casino legalization means to various financial sectors (e.g., wholesale banking, wealth management, leasing, insurance, cash management and payment). Points of consideration when engaging in casino related businesses. Open to: All staff of IBA Japan member firms. Publications Introduction to the Japanese Integrated Resort (IR) / Casino Law (2018年9月) Publications Legalization of Casinos in Japan: The Japan’s Casino Implementation Bill (2018年9月) Publications The Gambling Law Review - Edition 3 (Japan Chapter) (2018年7月).

It looks like casinos are finally becoming legal in Japan.

Casino legalization is a controversial issue with strong arguments on both sides. Supporters argue that developing integrated resort (IR) facilities including casinos would become one of the pillars in Japan’s growth strategy, as it will generate large consumption demand, particularly by increasing inbound visitors. On the other hand, opponents point to social problems such as gambling addiction.

Japan Casino Legalization

Gambling can cause outcomes that run against customers’ benefits, such as addiction and loss of huge amounts of money. Therefore, it is a crime. But even when the act is a crime, if there is a social benefit like financing local governments through public gambling, special laws can be made to decriminalize the act. With the same reasoning, casino legalization is being discussed.

The assumption in legalization of gambling is that it produces remarkably high customer satisfaction. That is the source of strong demand, and supporters are attempting to realize social benefits by using that demand. Similar things can be said for tobacco and liquor: considering their health impacts, we cannot deny their aspect of running against customers’ real gains, but there exists a very strong demand based on customer satisfaction. Therefore, they can sell even when high tax rates are imposed, which in turn creates a stream of tax revenue.

Japan Casino Legalization

In addition, it is extremely difficult to distinguish between fraud and fraud-like activities. For example, if you believe that a duvet is being sold at a price significantly exceeding its real value, even if you suspect it to be a fraud, there is nothing to be done if the person who purchased it believes the product is high quality because it is expensive. Such shady schemes also work based on their creation of high customer satisfaction.

Also, in areas that support modern consumption, such as fashion, food and drinks, entertainment, and so forth, customer satisfaction is formed at a level that far exceeds their critical functions and bare necessities of clothing, shelter and living. Put bluntly, the pathology of wasteful overconsumption has become a driving force for economic growth.

However, there are also established areas in this ailing modern society where it is crucial to consider the customers’ true benefit based on necessity, even against customer satisfaction. These are regulated industries including medicine, education, and finance.

Chief Executive Officer, HC Asset Management Co.,Ltd. Noriyuki Morimoto founded HC Asset Management in November 2002. As a pioneer investment consultant in Japan, he established the investment consulting business of Watson Wyatt K.K. (now Willis Towers Watson) in 1990.

On July 20, 2018, the Act to Implement Specified Integrated Resort Areas (the “Casino Implementation Act”) passed the Japanese Diet which legalized gambling to be operated by private entities in Japan. While there are many aspects which have been delegated to the determination by the ministry ordinance (in fact there are 331 items that are up for the ministry ordinance to determine), below are several key points of the Casino Implementation Act:

1. Size of casino facilities

   While the Casino Implementation Act is still silent on the actual limitation on the size of the casino as this has been relegated to the cabinet ordinance (Article 41 of the Casino Implementation Act), the working team concerning the ruling party’s IR Implementation law issued their opinion regarding the size of the casino floor. Considering that the location and size has yet to be defined, rather than setting a limitation on the absolute value, it was determined that the gross floor area for the casino in IR facilities shall be limited to 3% or less.
   The basis of the calculation shall be 3% of the “gross floor area” and not the land area, which should ensure the casino to be “only a part of the facilities.”

2. Limitation on the number of times of entry and means to verify identity

   Chapter VII of the Casino Implementation Act provides for a strict limitation on the number of times of entry and entry fee to prevent problem gambling. While there is no limitation on the number of times of entry for non-Japanese residents, the Japanese residents are limited to “3 times in 7 days + 10 times in 28 (Article 69 of the Casino Implementation Act), and “My Number cards” shall be utilized for the verification of identity and the number of times of entry (Article 70 of the Casino Implementation Act).

3. Entry fee

   The entry fee will be imposed to Japanese residents in the amount of 6,000 yen, the half of which shall be paid to the national government (Article 176 of the Casino Implementation Act) and the other half to the local government (Article 177 of the Casino Implementation Act).

4. Levy

   While there was a discussion of whether a progressive system could be imposed, since this may reduce the incentive for entities to expand their business by additional investment and presents a risk to discourage investment to realize the commonwealth, the levy was fixed at the rate of 30% of gross gaming revenue, half of which shall be paid to the national government (Article 192 of the Casino Implementation Act) and the other half to the local government (Article 193 of the Casino Implementation Act).

5. Number of IR areas

   Article 9 of the Casino Implementation Act provides that the number of location shall be limited to three (3). However, the Casino Implementation Act provides that after five (5) years have passed since the first designation, the Casino Implementation Act as a whole shall undergo a review and after seven (7) years have passed since the first designation of the IR, the number of location will be specifically reviewed giving consideration to local areas which desire and are preparing to establish the facilities while securing a period for determining the effect of IR (Article 4 of Supplementary Provisions to the Casino Implementation Act).

6. Relationship with cities where the facilities will be built

   The Casino Implementation Act provides that the enforcement policy to be prepared by the local government requires consent of the city where the IR will be actually located (Article 6 of the Casino Implementation Act), requiring a method of consensus-building at the ground level.

As mentioned above, while the details on how to implement casinos are to be determined by the ministry ordinance, some of the major items which have been debated for some time are now clarified by the Casino Implementation Act to a certain extent, and it should be fair to say that Japan has taken a big step closer for the first ever opening of the legalized casinos.

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