Japanese Online Gambling Laws and Regulations

For years, any form of gambling has been frowned upon in many countries. This hasn’t put a stop to avid gamblers and over the last few years the casino industry especially the online casino industry has blossomed into a lucrative business. Taking into consideration that this industry brings in large revenue annually, many countries have reconsidered their stance against the industry.

Japan, also known as the ‘Land of the Rising Sun’, is one of many countries that holds a lot of promise when it comes to land-based and online casino gambling. While Japan has a large population of over 127 million citizens, the government seems to have taken a negative stance on Japanese casinos until recently.

In this article, we’ll take an in-depth look at what the true and most recent gambling regulations are in Japan.

History of Gambling in Japan

Japan is one of the countries that have had laws in place regarding gambling since the early 1900s. It is not an unknown fact that Japan is a constitutional monarchy or that the power awarded to the emperor is mostly ceremonial and therefore very limited. From the early years of gambling, citizens were only permitted to partake in legal forms of gambling that have been approved and recommended by the leading party. 

At first, they were only allowed to bet on events such as bicycle racing and horse racing. Later on, two other sports namely boat races and motorbike races were added. Apart from these forms of legal gambling, there was one other form of gambling that has been legal for longer. 

The lottery has been around since the mid-17th Century in Japan. It was only in 1842 when it was discontinued for a short period of time before it got re-launched after World War II. The main idea behind bringing this form of gambling back was to gather enough funds to fix the damages done by nuclear bombs.

The National lottery known as Toto is the only legally licensed form of gambling both land-based and online apart from sports events betting and Pachinko. For a long period of time, the government was completely against legalizing land-based casinos or any other form of online gambling. 

Unfortunately, the avid group of gamblers in Japan have a mind of their own and are not hesitant to find gambling entertainment at foreign gambling sites.

New Gambling Regulations

Due to the determination of Japanese citizens to find more versatile online gambling sites as well as land-based options, the leading party has been forced to rethink their stance on gambling. It is because of this that Japan is in the process of legalizing more forms of gambling. The process towards legalizing gambling started in 2013, but it was only late in 2016 that the Japanese parliament passed a law to legalize gambling. The legalisation itself was a historic event as it laid 15 years of political arguments to bed. 

Many would say that the gambling regulations were changed and modified because of the revenue prospective legal gambling could bring. According to research by the Daiwa Research Institute, it was estimated that a limited number of just 3 casinos could generate as much as $10 billion in net profit a year. 

The current change in legislation has excited many international gaming companies as they’ve had their eye on investing in Japan for quite some time. Even with the new legislation, it will still take some time to finally get things in motion. According to some, it might take as much as 5-6 years before the best legal casinos will be fully operational in Japan.

When it comes to online gambling there are even more restrictions, at the current time players can legally only wager online for public sports events, soccer Toto and the national lottery. The country has extremely harsh penalties for any unlawful betting activities but with the lack of enforcement, many citizens still find their way to Japanese casinos. The penalties in place include a fine of ¥500,000 for first-time offenders. 

However, any repeat offenders can face up to 3 years imprisonment if caught and prosecuted. One would think that these strict laws and penalties would prevent citizens from gambling activities. In truth, it seems that these limitations only fuel their fire and motivate them to find foreign online gambling sources.

Will Gambling Winnings be Subjected to Tax?

There has been a lot of talk regarding the taxation of gambling funds. The longstanding legal gambling forms available are already paying a percentage of tax. In recent developments, there have been talks of an increased gambling tax charged to new legal casinos which could be a total of 22%.

Citizens who participate in the lottery aren’t required to pay tax no matter what amount their winnings happen to be. If you bet on sports events and win then you are required to report those earnings in your income tax returns. 

Online gambling winning will not be taxed. Due to the fact that there is no legalised system to regulate online gambling, the authorities cannot collect tax. Therefore, you are free to keep your winnings from any foreign online gambling site.

Is Online Gambling Legal in Japan?

With the recent move towards legalising Japanese casinos, one would think that legal online gambling isn’t far behind. In truth, it might be quite a while before you can enjoy legal online casino sites in Japan.

According to statistics, there are a lot of citizens who are surprisingly voting against the legalization of gambling. It’s probably safe to assume that the reason behind this is the growing problem with criminal activities through gambling such as money laundering as well as the increasing problem of gambling addiction. 

While online gambling is frowned upon in Japan there is no action taken by the government against participants. There are no online casinos in Japan itself but various large foreign online casinos welcome players from Japan.

With hundreds of online casinos available it can be difficult to find one that offers the right amount of games, online casino signup bonus and a safe and secure gaming environment. With the current legal stance on online gambling in Japan, a player cannot be protected against any fraudulent activity at any of the online sites. 

If you want to play at an online casino, it would be the safest to check out our list of top international casinos. These sites have been vetted and approved as safe, secure, and rewarding.