Japan’s Gambling Scene: A Look at the Present

## Japans Gambling Scene: A Look at the Present – iGB

Although Japan lacks casinos at present, what does the current gambling market resemble? Natalie Meyer, the founder and head of Tokyoesque, a Tokyo cultural insights firm, examines the present size and public opinion of the gambling sector in Japan.

**Home > Casinos & Gaming > Social Gaming > Japan’s Gambling Scene: A Look at the Present**

Japan’s Gambling Scene: A Look at the Present
Despite a long-standing prohibition on casinos in Japan, gambling and gaming exist in a hazy zone that is challenging to define and comprehend. For instance, lotteries are viewed as entertainment and thus have no minimum age requirement and no tax on prizes. Then there are exemptions, such as Japanese bicycle racing (Keirin) and horse racing (Keiba). The industry is highly transparent under strict rules.

The legal gambling industry in Japan is valued at 6.1 trillion yen ($56.6 billion) and has been steadily expanding since 2012, with only the national lottery (Takarakuji) exhibiting a decrease.

In reality, the market is significantly larger if you consider lotteries and pachinko (categorized as entertainment). Including these aspects, the entire industry is considerably larger than 25.7 trillion yen ($238.1 billion), with pachinko taking the lead, a slower-paced ball game comparable to slot machines.

In 2017, the size of the various gambling markets was as follows:

Pachinko: 19.5 trillion yen ($180.3 billion)

Horse racing: 3.3 trillion yen ($30.5 billion)

Boat racing: 1.2 trillion yen ($11.4 billion)

Lottery: 1.0 trillion yen ($9.3 billion)

Bicycle racing: 640 billion yen ($5.9 billion)

Motorcycle racing: 66 billion yen ($0.6 billion)

This doesn’t include non-Japanese online operators, which have immense potential. Since the enactment of the Integrated Resort Implementation Act in 2018, the gambling and casino industry has also become a national focus for various reasons (both positive and negative), with the law authorizing casinos under fairly stringent conditions.

As mentioned, the notorious pachinko parlors (not officially considered gambling because there is no exchange of money) were worth more than three times the entire legal gambling market in 2017. The industry experienced a downturn from 2006 to 2015, attributed to increasingly strict regulations and the emergence of new platforms like mobile gaming.

These gaming styles have flourished alongside modern Japan’s economic progress, becoming a broadly recognized form of amusement. They have a delicate connection to wagering, seen by some as low-class or even dubious. Data reveals that the profile of Japanese bettors is primarily male (over two-thirds), with a majority in the 40-50 age bracket (over half). Only 5% are in their 20s, clearly indicating a near absence of products aimed at younger demographics.

Thus, like other aspects of Japanese culture, there’s a division: on one side, concerns exist that the arrival of a Japanese casino era will lead to dependency, corruption, and other negative impacts on the populace. On the other side, gaming styles already present in the market for years are seen as acceptable, even enjoyable for some, albeit under strict rules.

This is most evident in the negative perception of pachinko, despite its prevalence in Japanese cities. A recent study revealed that “pachinko” evokes the following associations:

Pachinko is bad because…

56.7% It causes wagering dependency

46.1% It’s linked to the Yakuza

34.2% Players are of low quality

29.4% It is wagering

29.1% Foreigners operate pachinko parlors

24.5% Pachinko parlors evade taxes

These negative views, whether accurate or not, will extend into other aspects of wagering and gaming and should be examined and addressed cautiously based on the nature of the product. For instance, the perception of lotteries differs from online wagering; foreign operators, particularly those from the UK and Europe, possess advantages they can utilize – these regions are often perceived as unique and positive in the eyes of Japanese consumers.

Despite some negative opinions, data reveals that it’s not necessarily the lowest income groups who participate in gambling the most. So while gambling might be perceived as an activity for the “less fortunate”, this doesn’t necessarily reflect reality.

This indicates an opportunity to target various demographics, including the middle class and affluent players. While this might be evident from a non-Japanese perspective, it may require careful communication within the Japanese market. New operators can position themselves as a novel type of gaming product to appeal to these groups.

Navigating these complexities demands careful and thoughtful consideration, initially examining the gaps in the current market, and the potential benefits and drawbacks of being a non-Japanese brand.

How can new brands simplify the process for potential Japanese customers to envision what a reliable, engaging, and potentially lavish form of gaming looks like? To achieve this, we need to consider not only the ambiance or structure of the platform;

Nevertheless, it’s also crucial to think about how to draw in a Japanese audience (and which audience to target initially). Although the negative effects of gaming can be addressed, it’s essential to do so in a way that respects cultural sensitivities. For those willing to take the plunge, one of the world’s biggest markets is ready to connect with them.

**About:**

Natalie Meyer was born in Silicon Valley, pursued her studies in London, Washington D.C., and Tokyo, ultimately earning a Master’s degree in Global Media and Communications. Finding herself being contacted by both Japanese and British connections who required local channels for cutting-edge knowledge on a global scale, Natalie established Tokyoesque to foster mutual understanding and connections between markets.

Natalie has worked on a variety of market entry and research projects in Europe and Asia, frequently collaborating with startups, Japanese corporate circles, and the large events industry. She has a strong interest in global cities, yoga, meditation, new technologies, and the influence of cultural differences.

Sign up for the iGaming newsletter.