How Does Online Gambling Work in Japan

Online Gambling in Japan

In 2016, the Japanese government changed its laws concerning land-based casinos. Up until then, Chapter 23 of the Criminal Code law stated that no such place could operate. Now, they’ve changed it so that gambling sites are legal, as long as they are a part of a resort. The complex needs to contain a conference hall, a hotel, and other entertainment venues in order to be able to facilitate a casino floor. As of yet, there are plans for two casino resorts to open up in Yokohama and Osaka, with the officials predicting the Japanese gambling market to be worth $40 billion.

The initial idea was to have this change introduced in 2013 so that there was enough time for Tokyo to get its first casino resorts before the 2020 Summer Olympics. They hoped they’d be able to profit off of tourists who would naturally flood the city during those two weeks or so. However, due to time constraints, this plan looked increasingly unlikely to come to fruition.

But what’s going on with online gambling in Japan? Can players from Japan play casino games online for real money? In Japan, online gambling is illegal. As such, it’s unregulated. But there are still players playing online. Let’s check out how they do it.

Game Parlors and Sports Betting

Before we delve into online gambling in Japan, let’s first discuss the general gambling laws. Only some gambling types are allowed. For example, with sports betting, you can only place bets on bicycle, motorboat, horse, and motorcycle racing. And you can only do parimutuel betting. For those unfamiliar with this term, it means that all bets go to one pile. And once the betting house takes its edge (called the vigorish), the payouts are determined by the amount of money left in the pot. Other forms of gambling include mahjong, pachinko, and the lottery, which are considered as forms of amusement, rather than gambling. Their national lottery, for example, has been around since the 17th century.

Japan gambling

Pachinko is a Japanese game which is most commonly played in Japan. It has over 15,000 dedicated parlors. However, the major thing you should know about these gambling laws is that the government doesn’t really impose them. They are fairly strict — first-time offenders need to pay up ¥500,000, which is around $4,500. Repeated offenses can result in a 3-year jail sentence. However, the police rarely actually go through with this. Although you can’t use said parlors for betting, when you win, you get tokens, which you can later exchange for money. There was even a well-documented instance when a parlor called the police because they had their illegal tokens stolen. The police went for the thief and completely disregarded the parlor’s activity.

Online Gambling

Overall, online casinos in Japan are not allowed. In fact, online gambling is restricted to lottery, soccer Toto (Toto is their national lottery), and four aforementioned racing sports. Despite this, Japanese players still play at online casinos. The thing is, as is the case with many underground gambling houses in Japan, the government forbids them, but it doesn’t go all out to actually put an end to them.

When it comes to online casinos based overseas, they accept players from Japan. In recent years, they went as far as to target the Japanese market, with many casinos now even offering their websites in Japanese. The thing is, the Japanese government considers them illegal, but they turn a complete blind eye on it. As a result, there’s no regulation of said casinos going on. So if you’re playing from Japan, you need to make sure you pick the right gambling site.

With online casinos, there are a lot of gray areas with licensing and general practices these venues employ. So you have to do research before you decide to make your first deposit.

Picking the Right Casino

Since the government doesn’t really bother with any of that, you’ll have to check out on your own which casinos have a proper and credible license. Mind you, you’re doing something that’s illegal in your country, so it’s not surprising the government won’t help you out.

Ideally, you’d want your casino to be a licensee of a reputable regulatory body, such as the licensing commissions of the countries of Malta, the United Kingdom, and Gibraltar. These jurisdictions have a high set of standards from their casinos. So if you see that a casino has obtained one such license, you can rest assured that they don’t use pirated software.

slot gambling

Additionally, a major issue in online gambling is payment on casinos’ side. There are a lot of rogue casinos which are late with payments (forcing you to wait for months to receive your winnings), and sometimes, there’s no payment at all.

Another thing you should look into are casino bonuses. To differentiate themselves from the competition, casinos use promotional offers which allow players to make a profit without playing with their own money. As a player, you should take advantage of this. So go bonus hunting and find a resputable casino with great promotions.

The bottom line is — it’s not legal to conduct gambling online, but the government doesn’t enforce penalties they’ve implemented. So you can still do it freely — just don’t be too public about it. Conduct your gambling in the privacy of your home, rather than going to a public Internet café or something similar.

Making Deposits

While all major banks actually decline to process any funds to online casinos, this is more of an inconvenience than an actual means of stopping online gaming. However, you can bypass this easily by using Pokerstars (somehow, they seem not to have heard about this major site which has been around for almost 20 years) and a local bank transfer. Afterward, you can use the Pokerstars funds and transfer them to any other website (via Neteller, for instance).

When it comes to the taxation of winnings, that’s something you don’t need to worry about when playing online. This all stems from the fact that there’s no legal system in place, so there’s no way for the government to collect tax.

Players who partake in lottery also don’t need to pay tax, irrespective of how much they win. Sports betting wins, however, need to be reported in your income tax returns.

History of Japan Gambling

Japan is one of the few countries which had implemented gambling regulations at the beginning of the 20th century. Firstly, it was only allowed to place bets on bicycle racing and horse racing. As we’ve already said, their national lottery came to be in the 17th century. It has been active since then, with the exception of the second half of the 19th century and the first half of the 20th, but they’ve returned to action after the Second World War. The reason why they brought it back was to generate funds to repair all war damages (Hiroshima and Nagasaki needed a lot of fixing).

Up until 2016, Toto was the only form of gambling which had a license, apart from pachinko parlors and sports betting.

Legalization Is Coming

As we’ve already stated, just three years into the change in law, and the estimations of the gambling market in Japan exceed the $40-billion mark. Japan has a long history of frowning upon gambling, as it represents a financial loss and a health hazard. But let’s face it — the money’s too great. Eventually, every government caves to the allure that is profit. With this in mind, it’s only a matter of time until online gambling and gambling, in general, become fully legal in Japan.

Until then, the Japanese need to take their money offshore and play on foreign-owned websites.

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