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:

• Japan Casino Legalization
• Japan Casino Legalization

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.

• Here’s where Japanese casino legalization comes in. Shinzo Abe is pro-legalization and the word on the street is that the so-called casino study bill, which is currently being debated in the.
• Hitoshi Ishihara is a partner at Anderson Mōri & Tomotsune. As the sole Japanese attorney admitted to the International Masters of Gaming Law (IMGL), Mr Ishihara has extensive focus and knowledge concerning Japanese gaming law, including the recently legalized casino operations in Japan, and has been recognized as the Japanese Gaming Lawyer of the Year by multiple sources in recent years.

Japan’s parliament passed a law on Thursday to legalize casinos, ending 15 years of political argument and opening the way for projects that combine high-stakes gambling with hotels, shopping. Japan has officially passed a new law that outlines the legalization of casino resorts in the country, which has opened the opportunity to create three new Japanese resorts with casinos. It’s expected for Japanese companies and local municipalities to begin discussions, proposals, and other projects regarding this new attraction. In December 2016, the Japanese Diet passed the integrated resorts promotion law, the first in a two-step legislative process to legalize casinos in Japan. Japan passed the promotion law shortly after the ruling Liberal Democratic Party (LDP) – the party of Prime Minister Shinzo Abe — won enough seats in the July 2016 Upper House election to.

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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Japan Casino Legalization

In December 2016, the Japanese Diet passed the integrated resorts promotion law, the first in a two-step legislative process to legalize casinos in Japan. Japan passed the promotion law shortly after the ruling Liberal Democratic Party (LDP) – the party of Prime Minister Shinzo Abe — won enough seats in the July 2016 Upper House election to no longer be reliant on their junior coalition partner, the Komeito. This Upper House election was significant for casino-related developments because it allowed the LDP to bypass Komeito, a political party backed by an influential Buddhist group that opposes gambling on principle.

With the goal to open the first integrated resorts in 2022 or 2023, Abe’s vision, when this legislation first passed, was to use casinos as the cure to the post-Olympics “hangover” – the dip in economic activity that many host nations of the Olympics suffer. Since then, the casinos initiative has pressed forward under Abe’s leadership.

Media coverage and risk analysts covering the issue at the time anticipated the dangers of organized crime getting involved in newly opened casinos. Media outlets may have overblown the risks of organized crime’s overt involvement. However, more soberingly, risk analysts were seriously concerned about the business opportunity that newly legalized casinos might provide to organized crime – such as in contracts for the physical construction of the casinos that could be won by subcontractors or sub-subcontractors controlled by organized crime.

Interestingly, these anticipated risks have yet to materialize in a publicly noticeable way. However, an important unanticipated risk has manifested itself in recent weeks as casino-related political corruption has come to dominate the headlines. A Chinese company has been under fire for giving bribes to at least six Japanese politicians. Such bribes would be illegal under the Political Fund Control Law, which bans donations from foreigners or foreign companies. Apparently, legalizing casinos not only provided an opportunity for the involvement of organized crime, but also the opportunity for foreign actors to get involved in corruption.

As the casino-related bribery scandal continues to grow, last Monday, Mikio Shimoji became the first politician to acknowledge that he received money from an individual connected with 500.com, a Chinese company interested in operating a casino in Japan. Shimoji is a member of the opposition Nippon Ishin party. Shimoji submitted his resignation to Nippon Ishin on Tuesday, but the party rejected the letter, instead formally expelling him the next day. Shimoji is still debating whether to resign as a lower house member.

Shimoji’s admission lends credibility to the accusations directed against four other lawmakers suspected of receiving money from 500.com: Takeshi Iwaya, Masahisa Miyazaki, Hiroyuki Nakamura, and Toshimitsu Funahashi, all of whom belong to the LDP. As part of the same scandal, LDP politician Tsukasa Akimoto was arrested on Christmas Day on suspicion of receiving bribes from 500.com. Akimoto resigned from the LDP that very day, though he did not step down as a lower house member.

By Mina Pollman, The Diplomat, 10 January 2020

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