## The Gambling Landscape in Japan: A Current Overview – iGB

Although Japan currently lacks casinos, what is the present state of gambling? Natalie Meyer, the leader of Tokyoesque, a company specializing in cultural understanding, examined the Japanese gambling sector and public sentiment towards it.

Japan has a long-standing tradition of prohibiting casinos, yet gambling and gaming exist in a peculiar, difficult-to-grasp realm. For instance, lotteries are viewed as a form of entertainment, thus there are no age restrictions and no tax on prizes. Other exceptions exist, such as Japanese bicycle racing (keirin) and horse racing (keiba). Due to stringent regulations, the industry exhibits a high level of transparency.

The legal gambling industry in Japan generates 6.1 trillion yen (approximately $56.6 billion) and has been expanding since 2012. The sole exception is the national lottery (Takarakuji), which has been experiencing financial losses.

Actually, the marketplace is considerably larger if you factor in lotteries and pachinko (which are categorized as entertainment). Taking these elements into account, the entire sector is significantly larger than 25.7 trillion yen ($238.1 billion), with pachinko dominating, a ball game similar to slot machines but with a slower pace.

The market size of various types of games in 2017:

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 does not include non-Japanese online operators, which have substantial potential. Since the passage of the Integrated Resort Implementation Law in 2018, the gambling and casino industry has also become a national focus for various positive and negative reasons, making casinos legal under fairly strict conditions.

As previously stated, the notorious pachinko parlors, which are not officially considered gambling due to the lack of money exchange, were worth more than three times the entire legal gambling market in 2017. The industry experienced a downturn between 2006 and 2015, attributed to increasingly stringent regulations and the emergence of new platforms like mobile games.

These gaming styles have flourished alongside the modern Japanese economy, becoming a widespread form of amusement with subtle connections to wagering, seen by some as crude and even questionable. Data suggests that the profile of Japanese bettors is predominantly male (over two-thirds), with a majority being in the 40-50 age range (over half). Only 5% are in their 20s, clearly indicating a lack of products aimed at younger demographics.

Therefore, like other facets of Japanese culture, there is a contrast: on one hand, there are concerns that the arrival of a casino era in Japan will lead to dependency, corruption, and other negative impacts on the populace. On the other hand, the existing gaming styles that have been around for years are considered acceptable, even a form of entertainment for some, even in heavily regulated environments.

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

Pachinko is bad because…

56.7% Wagering addiction issues

46.1% It’s connected to the Yakuza

34.2% Players are of poor quality

29.4% It’s wagering

29.1% Foreigners run pachinko parlors

24.5% Pachinko parlors are tax evaders

These unfavorable views, whether accurate or not, will spread to other aspects of betting and gaming and must be examined and addressed cautiously based on the kind of product. For instance, the perception of lotteries is distinct from that of online gambling; foreign operators, particularly those from the UK and Europe, have a benefit they can utilize – these areas are often viewed as exciting and favorable in the eyes of Japanese consumers.

Despite some negative opinions, data indicates that it is not necessarily the lowest income groups that are most engaged in gambling. Thus, while gambling may be seen as an activity for the “less fortunate,” this is not the actual situation.

This suggests an opportunity to target multiple demographics, including the middle class and high-wealth players. While this may be clear from a non-Japanese viewpoint, it may need to be carefully communicated in the Japanese marketplace. Incoming operators can position themselves as a new type of gaming product to appeal to these demographics.

Navigating these waters requires careful and thoughtful consideration, beginning with understanding the gaps in the current marketplace, and the potential benefits and drawbacks of non-Japanese brands.

How can inbound brands make it easy for prospective Japanese customers to envision a reliable, enjoyable, and potentially opulent form of gaming? To achieve this, we need to consider more than just the ambiance or structure of the platform;

Nevertheless, the message delivered should resonate with a Japanese audience (and first pinpoint the target audience). The detrimental effects of gaming can be addressed, but must be handled with cultural sensitivity. For those willing to engage, one of the world’s largest markets awaits to forge connections.

**About the Author:**

Natalie Meyer was born in Silicon Valley and obtained a Master’s degree in Global Media and Communications after studying in London, Washington D.C., and Tokyo. Finding herself drawn to the way Japan and the UK connect, recognizing the need for locals to access global innovation knowledge, Natalie established Tokyoesque to cultivate mutual understanding and connection between markets.

Natalie has worked on a variety of market entry and research projects across Europe and Asia, frequently transitioning between startups, the Japanese business world, and the large events industry. She has a deep interest in global cities, yoga, meditation, new technologies, and the influence of cultural differences.

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This talented writer and mathematician holds a Ph.D. in Applied Mathematics and a Masters in Probability Theory. With a deep understanding of the intricacies of casino games, they have published numerous articles on game theory, probability, and combinatorics in relation to gambling. Their expertise in discrete mathematics and stochastic processes has made them a sought-after consultant for licensed casinos worldwide. Their articles, reviews, and news pieces provide valuable insights into the world of casino gaming.

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