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.

1. Japan Casino Legalization
2. Japan Casino Legalization

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.

TOKYO - Japanese lawmakers on July 20 enacted controversial legislation legalizing gambling resorts, a move nearly two decades in the making.

1. 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.
2. Gambling in Japan: The History Officially speaking, gambling in this part of the world is still considered legal and has been considered illegal since 1907. By the end of the Meiji era, many.

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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October 22, 2018

Japan Casino Legalization

by Noriyuki Morimoto

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.

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.

Japan Casino Legalization

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.

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.