Japan casino licensing regulations suggest emphasis on eliminating organized crime

Japan’s burgeoning casino industry promises to be the most strictly regulated industry in Japan, with draft casino regulations released earlier this month suggesting a clear focus on eliminating organized crime, according to a new report.

The Japan Casino Regulatory Commission (JCRC) issued the draft regulations on 2 April 2021, providing stakeholders with their first real insight into how casinos will be regulated and the licensing process required to operate one. It also confirmed certain key details such as which games would be allowed, the definition of casino floor space and issuance of credit.

In a detailed analysis titled “Japan Casino Operation Regulation Highlights” published by Japanese consultancy firm Bay City Ventures last week, Managing Director Joji Kokuryo notes that the Commission has a clear mission to stamp out any possibility of organized crime infiltrating the industry.

“The process for Japan is clearly based on Nevada licensing procedures with an emphasis on exclusion of organized crime,” he said. “The same requirements also apply to casino-related service and product suppliers such as gaming machine suppliers.”

Under the IR Implementation Law’s standards for casino licensing, any applicant operator, major shareholders, holders of land or facility rights and persons of influence must meet “social credibility” standards and will be disqualified if any relation to organized crime becomes apparent, writes Kokuryo. Individuals and organizations holding 5% or more in any consortium will also face rigorous background investigations.

“Initial local reaction from the corporate world unfamiliar with the gaming industry looks to be one of surprise, as the licensing requirements are possibly the most strict that has been seen in domestic business,” Kokuryo adds.

“While the Japanese government’s goal of being the most tightly regulated gaming market in the world is far from complete, they have certainly taken the important first step of being the most highly regulated industry in Japan.”

Kokuryo described the draft regulations and licensing requirements within as “very unique to Japan” but also praised the JCRC for being “surprisingly thorough.”

“There will certainly be additional regulation on topics such as secure data protection and elaboration on things such as the further detailed categorization of gambling addiction prevention, gambling addiction treatment, responsible gaming and player protection,” he added.

“There is also much to be done on the local government and IR operator side going forward, and all of these elements will help to shape the future of gaming in Japan.”