Japan police investigate illegal offshore casinos
Japan’s National Police Agency (NPA) has initiated a groundbreaking investigation into offshore casinos that target Japanese players. Although online gambling is currently prohibited in Japan, many iGaming platforms propagate the notion that participation is legal for users.
The NPA’s proactive stance aims to scrutinize these offshore gambling operations, focusing on their tactics for attracting Japanese players.
Many Japanese residents mistakenly assume that iGaming websites with servers based abroad can operate legally. These sites frequently mislead potential gamblers, claiming either that their operations are legal or that they have not been explicitly declared illegal. They often flaunt licensure from other jurisdictions to create a misleading sense of legitimacy.
Gambling Restrictions in Japan
In Japan, the gambling landscape remains tightly regulated. Legal forms of gambling include lotteries and specific racing formats such as horse racing as well as bicycle, motorcycle, and powerboat racing. All other gambling activities are classified as illegal under Article 185 of the Penal Code.
However, a significant shift in the gaming landscape is slated for 2030, with the opening of the nation’s first integrated resort (IR) in Osaka. This ₹1.08 trillion (£6.2 billion/€7.35 billion/$8.1 billion) venue will allow localized access under specific income requirements and a daily admission fee. Foreign visitors, in contrast, will enjoy complimentary access.
MGM Resorts anticipates that local visitors will predominantly support the facility. The company estimates that MGM Osaka will attract 20 million patrons annually, comprising 6 million tourists and 14 million Japanese residents.
Additionally, there were discussions among lawmakers regarding the legalization of online casinos as part of the IR Development Act introduced in 2018. This law, which came into effect in 2021, shows a potential shift toward more liberal gambling regulations in Japan.
Surge in Online Gambling During COVID-19
The pandemic has had a profound impact on online gambling trends in Japan. According to NPA reports, participation rates surged during the COVID-19 lockdowns, particularly among younger demographics. Data from digital analysis firm Similarweb Ltd shows a drastic increase in traffic to gambling sites, from approximately 700,000 visits monthly in late 2018 to an astonishing 83 million by fall 2021.
With this growth comes an escalating concern surrounding its social impact. The Society Concerned about Gambling Addiction, based in Tokyo, reported a staggering 372% rise in calls related to online gambling between 2019 and 2023.
Moreover, inquiries regarding legal forms of gambling also saw an uptick. Notably, 28% of calls were related to motorboat racing bets, a 22.7% increase, while queries about bicycle race wagers accounted for 18.2% of the total, an increase of 15.5%. Alarmingly, 28.2% of calls involved crimes linked to gambling addiction, such as borrowing from loan sharks or committing theft, to sustain gambling habits.
On average, compulsive gamblers accrued debts of ¥8.55 million in 2023, prompting the organization to issue a dire warning: “The bar has been lowered,” foreseeing a continued rise in young gambling addicts in the future.
Urgent Need for Regulation in Access to Gambling
A recent editorial on August 29 in the Yomiuri Shimbun emphasized the growing issue of individuals accruing significant debts through online casinos. Some have resorted to “dark part-time jobs”—including fraudulent activities—to repay their debts. The editorial stated, “The current situation, where unregulated access to online casinos is commonplace, is serious and must not be overlooked.”
Drawing comparisons to practices in Europe, the article recommended that Japan should consider implementing blocking measures to restrict access to illegal online gambling sites in a bid to mitigate these issues.
Targeting the Criminal Element
In response to the growing gambling-related issues, authorities are intensifying their efforts to combat illegal online gambling operations and their associated networks.
In a landmark move, police in Tokyo, Aichi, and Fukuoka prefectures made their first arrests for facilitating online casino payments in September, exposing a network believed to have handled tens of billions of yen while netting approximately ¥2.1 billion in commission fees.
Earlier in February, law enforcement apprehended seven individuals linked to an illegal online gambling site in Kyoto, which had allegedly processed ¥2.3 billion in deposits since its inception in 2011, all while misrepresenting the operation as a legal entertainment venue.
In June, Osaka law enforcement arrested the leader of a substantial money-laundering ring, linked to proceeds from online gambling as well as other illicit activities.
The NPA’s ongoing investigation aims to provide crucial insights for future regulatory discussions and responsible gaming initiatives. An agency representative stated, “We will gather foundational data to comprehensively understand the situation and develop effective countermeasures.”
