Gambling in Japan is governed by some of the most ambiguous laws in the world, but that has not stopped the Japanese people from enjoying many forms of gambling including oversea online casinos. Some foreign online casino platforms are operate it for the Japanese market, although they are in a legal gray area and an ever-increasing demand vs. regulation battle is taking place.
This article gives you a deep understanding about the laws and regulations governing gambling in Japan.
Japan Gambling Laws and Crimes
In Japan, gambling refers to betting money or other valuables on outcomes determined by chance, which are beyond a person’s control. Typical examples include dice, cards, and the outcomes of sports events, although games like Igo and Shogi can also be used for betting.
The term “gambling crime” refers to engaging in these activities where they are not legally permitted.
While activities such as bicycle racing and horse racing also involve gambling, they are recognized and regulated as public gambling, and therefore, they are legal.
Here is a summary of legalities for gambling in Japan.
| Relevant Product | Who regulates it in digital form? | Who regulates it in land-based form? | ||
| Casino Gaming | Casino Gaming (including Big Six, Mini-Baccarat, Roulette, and Blackjack) | Online Casino is Prohibited in Japan. Even betting on a oversea online casino is not allowed as long as the user is in Japan. | Japan Casino Regulatory Commission Japan approved a plan to build the country’s first resort casino in Osaka. | |
| Poker | ||||
| Bingo | ||||
| Betting | Betting | Online betting is permitted exclusively for horse races, bicycle races, motorcycle races, and motorboat races that are operated and regulated by the Japanese government or municipal bodies. | Land-based betting is allowed solely on horse races, bicycle races, motorcycle races, and motorboat races that are operated and regulated by the Japanese government or municipal bodies. | |
| Sports and horse race betting, when regulated separately from other forms of betting. | The regulation is the same as above. Additionally, there have been recent discussions within the Japanese government about legalizing sports betting. | |||
| Fantasy betting involves placing bets on a ‘league’ or ‘portfolio’ selection over a period of time, typically related to sports or stock portfolios. | Fantasy betting is generally prohibited, except when prizes are provided by a third-party sponsor. However, there are ongoing discussions about potentially legalizing fantasy betting. | |||
| Lotteries | Lotteries | Lottery tickets can only be issued online by municipal authorities, such as prefectures and government-designated cities. The Sports Promotion Lottery (toto/BIG) is issued by the Japan Sports Council under the supervision of the Ministry of Education, Culture, Sports, Science, and Technology (MEXT). | Lottery tickets can only be issued by specific municipal bodies, and their operation is delegated to designated banks. The Sports Promotion Lottery (toto/BIG) is issued by the Japan Sports Council under the supervision of the Ministry of Education, Culture, Sports, Science, and Technology (MEXT). | |
| Social/Skill arrangements | “Social” gaming that does not offer prizes in the form of money or monetary value. | Not specifically regulated. | ||
| Skill games and competitions that do not involve any element of chance. | Not specifically regulated; however, excessive prizes may be prohibited by the Consumer Affairs Agency or the Fair Trade Commission under the Act against Unjustifiable Premiums and Misleading Representations. | |||
What Constitutes a Gambling Crime?
(Article 185 – Gambling)
Anyone who gambles shall be punished by a fine of no more than 500,000 yen or a minor fine. However, this does not apply when the stakes are limited to items used for temporary entertainment.
(Article 186 – Habitual Gambling and Operating a Gambling Venue for Profit)
Anyone who habitually gambles shall be punished with imprisonment for up to three years.
Source: Penal Code Articles 185 and 186
Valuables such as money, cars, and jewelry are examples of property involved in gambling crimes. A key condition of a gambling crime is that the winner gains property while the loser forfeits theirs.
Furthermore, for gambling to be established, there must be a risk on both sides. For instance, a bingo game with prizes or a tournament with a winning prize does not qualify as gambling if only one party (the organizer) bears the risk.
Exceptions: Betting on Items for Temporary Entertainment
“Items for temporary entertainment” refers to things consumed for momentary pleasure, which are not subject to gambling laws. For example, betting on who pays for dinner or drinks does not constitute a gambling crime.
On the other hand, wagering money or goods, even between individuals, can constitute a gambling crime. For instance, a bet involving trading cards between parties can establish a gambling offense.
Public gambling, such as horse racing, boat racing, lotteries, and licensed pachinko parlors, is protected by law and therefore does not constitute illegal gambling. While it might seem that these activities could be considered gambling crimes, their legal status as authorized betting operations ensures that they are permitted and regulated under specific laws.
| Activities Not Considered Gambling Crimes | Relevant Legislation |
|---|---|
| Lotteries | Prize Draw Ticket Law |
| Horse Racing | Horse Racing Law |
| Auto Race | Light Motor Vehicle Racing Law |
| Bicycle Racing (Keirin) | Bicycle Racing Law |
| Boat Racing (Kyotei) | Motorboat Racing Law |
| New Year’s Gift Postcards | Law Concerning New Year’s Gift Postcards |
| Pachinko | – |
Common Illegal Betting Activities
Even activities commonly known as entertainment can become grounds for arrest under gambling crime laws if they involve betting.
Here, we will explain scenarios where the likelihood of being arrested for gambling crimes is high.
Underground Slot Machines
Illegal pachinko parlors, often referred to as “dark slots,” operate without licenses, usually in inconspicuous places such as apartments. These establishments are illegal.
Backroom Casino and Online Casinos
In Japan, casinos are only legal if they meet the criteria set for Integrated Resorts. Elsewhere, they are considered illegal. Like illegal slot parlors, patrons of backroom casinos can also be arrested for gambling crimes. Additionally, while some might think that using foreign online casinos officially licensed might skirt legality, participating in online casinos can still constitute a gambling crime, leading to arrests.
Betting on Mahjong, Golf, and Sports
Mahjong and golf are widely recognized as recreational activities and sports. However, betting on the outcomes of games turns them into potential gambling crimes, increasing the risk of arrest. Many high-profile arrests related to gambling often involve betting on mahjong or golf.
Sports where outcomes are clearly defined are often the subject of bets. Known as “bookmaking” in the West, this practice qualifies as a gambling crime in Japan.
Legal Gambling: Exemptions and Regulations
It’s common to wonder, “Why aren’t pachinko and horse racing considered gambling crimes?” in Japan.
Public gambling, including pachinko parlors and horse racing, when operated under government authorization or as public enterprises, is legally permitted. These activities are regulated under specific laws that allow them to function as exceptions to general gambling prohibitions, ensuring that they are conducted in a controlled and legal manner.
Pachinko
Pachinko parlors in Japan are authorized to operate under the “Law Regulating Adult Entertainment Businesses.” However, this law prohibits providing cash or securities as direct prizes. To comply legally, pachinko parlors exchange the balls won during play for prizes. These prizes can then be sold for cash at nearby licensed antique dealers, known as prize exchange offices. This business model, referred to as the “three-shop system,” allows for the legal operation of pachinko parlors under current regulations.
Public Gambling
Sports such as horse racing and motorboat racing are legally operated under their respective laws, such as the Horse Racing Law and the Motorboat Racing Law.
Lotteries
State-run lotteries are legally conducted under strict regulations, with proceeds often directed towards public welfare projects, including education and infrastructure. The Ministry of Internal Affairs and Communications provides comprehensive guidelines and details on lottery operations in Japan.
Case Studies: Arrests and Legal Actions
Though some gambling activities like pachinko and horse racing are legal in Japan, it’s important to recognize that unauthorized gambling is still a criminal offense.
Here, we will discuss examples of how engaging in illegal gambling can lead to arrest and prosecution, underscoring the risks involved.
Arrests of Both Operators and Patrons in Illegal Slot Facilities
In an incident in Utsunomiya City, Tochigi Prefecture, the manager and three male customers were arrested for illegal gambling activities in a mixed-use building. It’s important to note that not only those running the operation but also the patrons were arrested. People who seek more excitement than what regular pachinko parlors offer and engage in illegal slot machine gambling put themselves at significant risk of being arrested during police raids.
Reference: Yomiuri Shimbun Online
Impact of Lockdowns on Illegal Gambling Activities
In Chiyoda, a business district of Tokyo, the manager, employees, and customers inside a venue were arrested for operating an illegal poker gambling establishment. The increase in such activities may be attributed to the restrictions on movement and decrease in entertainment options due to the COVID-19 pandemic, leading some to seek new forms of excitement through illegal gambling.
High-Profile Gambling Arrests
Every year, there are reports of celebrities, athletes, and political figures being arrested or suspected of gambling. This is particularly problematic for athletes who participate in betting, as their involvement in illegal gambling can lead to severe repercussions, including tarnishing the reputation of their industry and facing harsh penalties like expulsion from their sport.
Reference: livedoor News
Online Casino Operators, Overseas Sites Exposed for the First Time in Japan
The Cyber Investigation Division of the Kyoto Prefectural Police arrested seven men and women on suspicion of illegal operation of online casinos. This is believed to be the first time in Japan that an operator of an online casino on an overseas site, which is difficult to investigate in Japan, has been arrested on the same charge. The seven were arrested on suspicion of conspiring to operate DORA Mahjong, a members-only online casino managed by an overseas corporation for Japanese players. More than 70,000 users and those “induced” by advertisements are also guilty of the crime.
Reference: Yahoo News
Japan Police Reports on Online Casino
This information pertains to the enforcement and arrest incidents related to online gambling, as announced by the Japanese police. The data includes cases of individuals gambling at online casinos operated by companies based overseas, conducted from private homes within Japan.
- Arrests were made for the offense of simple gambling when individuals, using personal computers installed in their homes, connected to online casino sites operated by foreign companies and gambled against dealers on those sites.
- For repeated gambling offenses, individuals were arrested for habitually facilitating gambling by allowing Japanese gamblers to access online casino sites hosted on servers abroad from personal computers at their homes, and engaging in monetary bets. Gamblers involved were arrested for the offense of simple gambling.
Regarding the crackdown on gambling offenses related to online casinos over the past three years:
- In 2020, there were 16 cases involving 121 individuals.
- In 2021, there were 16 cases involving 127 individuals.
- In 2022, there were 10 cases involving 59 individuals.
Reference: National Police Agency
Consequences of Gambling Crimes
This section explains the severity of the crime if you are actually arrested for gambling. Acts related to gambling are also punishable under the Penal Code as “crimes related to gambling and wealth” and the penalties vary depending on the frequency of the gambling and whether you are a user or provider of the gambling.
Penalties for Various Gambling Offenses
I’ll explain the severity of the punishment for those actually arrested for gambling in Japan.
Acts related to gambling are addressed under “Crimes Related to Gambling and Lotteries” in the penal code, and the penalties vary depending on the frequency of gambling and whether the individual is a user or a provider.
Simple Gambling Crime (Fine of up to 500,000 yen or a minor fine)
Under Japanese law, anyone who engages in gambling can be fined up to 500,000 yen or subjected to a minor fine. However, this does not apply if the stakes are items used for temporary entertainment.
Source: Penal Code Article 185 | e-Gov
Engaging in simple gambling can lead to arrest, even in cases of private betting among individuals. However, minor private bets are unlikely to result in immediate arrest, similar to how picking up 100 yen on the street wouldn’t instantly lead to an arrest for misappropriation of lost property.
Arrests are more likely in situations involving illegal operations like backroom casinos, online casino or when large amounts of money or valuable items are wagered.
Habitual Gambling Crime (Up to 3 years of imprisonment)
Individuals who habitually engage in gambling can face up to three years in prison.
Source: Penal Code Article 186(1) | e-Gov
Habitual gambling, such as managing a backroom casino or consistently engaging in gambling, could result in a charge of habitual gambling crime.
Profit from Opening a Gambling Place (3 months to 5 years of imprisonment)
Anyone who opens a gambling place or unites gamblers to gain profit can be sentenced to between three months and five years of imprisonment.
Source: Penal Code Article 186(2) | e-Gov
Opening a gambling venue involves advertising or gathering people for gambling and applies to those who initiate such operations.
Organized Crime Punishment Law (Up to 5 years imprisonment)
This law imposes harsher penalties for organized crime. There are precedents where this law has been applied to cases involving Baccarat gambling. These will be discussed in more detail under “Court Cases Involving Arrests for Gambling Crimes.”
Arrest Procedures and Legal Proceedings
As mentioned earlier, the likelihood of being arrested for gambling among friends is not high for the following reasons:
- There is no one to report the activity.
- There is no evidence left behind.
However, if gambling becomes habitual, the stakes may increase, and even within the group, financial disputes could arise. These disputes might lead to the involvement of the police and could expose the gambling activities.
How Arrests Are Made
Caught in the Act
When it comes to organized and habitual gambling, police who have been monitoring the gambling venues may catch suspects in the act and arrest them on the spot.
In cases of organized and habitual gambling where arrests are made in the act, not only the operators but also the customers can be arrested on gambling charges.
Individuals using illegal gambling facilities, often referred to as underground slots or backroom casinos, should be aware that they could be arrested at any moment.
Chain Arrests
Gambling requires the participation of two or more individuals, so even if you are not initially arrested, it’s possible that an arrest of someone in your group could lead to further police investigation that extends to you.
For example, if one person is arrested, analysis of their smartphone or their statements could reveal the identities of their gambling associates, prompting further investigations into those individuals.
From Arrest to Court
Processing Through the Legal System
Police Interrogation
When arrested, individuals first undergo police interrogation. The police must transfer the case and the detainee to the prosecutor within 48 hours. During interrogation, the primary goal is to extract information about the incident from the suspect through various questions.
Key Points During Interrogation
During interrogation, a statement record (which documents the suspect’s account) is taken. If the police record contains incorrect information, suspects should not sign it as it could be used as evidence against them in court. Misrepresented facts in the record could compromise the suspect’s position if the case goes to trial.
Prosecutor’s Interrogation
Upon receiving the case, the prosecutor has 24 hours to decide whether further detention of the suspect is necessary, especially in cases involving serious crimes or where there is a risk of flight.
Detention and Trial Processes
Detention Period
If the prosecutor deems detention necessary, a request is made to the court. If approved, the suspect is detained for a standard period of 10 days, extendable by up to another 10 days. During this time, the prosecutor decides whether to indict or dismiss the case.
Indictment or Dismissal
If the decision is to dismiss, the suspect is released. However, if indicted, the suspect proceeds to the first trial, where statistically, the conviction rate is 99.9%.
Summary
In Japan, gambling laws strictly regulate legal activities and prohibit unauthorized ones. Legal gambling includes public sports like horse racing and lotteries, governed by respective laws and managed by municipal or government bodies. Pachinko, while popular, operates in a grey area under entertainment laws, not officially recognized as gambling.
Traditional casino activities are mostly banned, except in licensed integrated resorts regulated by the Japan Casino Regulatory Commission. Online casino and gambling is largely illegal, with discussions ongoing about legalizing additional forms like sports betting and fantasy sports. The Penal Code addresses illegal gambling with stringent penalties, distinguishing between occasional and habitual gambling offenses.