Japan Today



Would legalized gambling ease Japan's economic woes?


In the wake of the devastating March 11 catastrophe, Japan's economy is confronted with the prospect of not just an economic recession, but long-term contraction that threatens to undo decades of growth. Estimates of the funding required for Tohoku's economic recovery are in the range of 10 to 20 trillion yen, and as the country has already accumulated up a huge fiscal deficit, a tax increase appears unavoidable.

But higher taxes, warns Weekly Playboy (May 2) are almost certain to have the effect of reduced consumer spending, cutting into business profits and resulting in lower tax revenues.

As another option, the magazine proposes legalizing gambling casinos, an idea long debated in Japan but for various reasons never adopted.

"Setting up casinos in Tohoku would contribute to employment and tax revenues," asserts Takashi Kiso, head of the Tokyo-based International Casino Institute Ltd, a consultancy established in January of this year. "Taxes from their proceeds would go to recovery, and no outlays of public funds would be required to build or operate them. They would definitely pave the way to recovery."

As a successful example of the introduction of gambling to raise revenues after a major disaster, Kiso points to the U.S. state of Mississippi, which suffered extensive damage in the wake of Hurricane Katrina.

"Some 2 million people were affected by Hurricane Katrina in 2005," says Kiso. "Mississippi's legislature legalized gambling, on which it imposed an 8% state tax and 3.2% local tax. These proved to be a valuable source of revenues that went toward reconstruction."

Prior to that, Mississippi had only permitted small-scale riverboat gambling. After Katrina, the law was revised to permit casinos on land. Over the past five years, notes Kiso, they have generated tax revenues equivalent to 152.8 billion yen and moreover, casino-related investments have pumped 2.6 trillion yen into the state and created jobs for 25,739 people, whose earnings totaled 64.8 billion yen.

According to a source at a Japanese think tank, the Tokyo metropolitan government was the first to propose the opening of a casino, in 1999, which was envisaged as part of a hotel and entertainment complex to be located at Odaiba.

The plan called for construction outlays of 200 billion yen, and projections estimated the complex would generate an economic boost of over 500 billion yen.

Tokyo Gov Shintaro Ishihara worked as chief pitchman for the project. In 2001, Asian gambling magnate Stanley Ho was said to made a secret visit to Tokyo to discuss the possibility of investment in the scheme.

Since then, about 30 local governments in Japan have campaigned for their own legalized gambling facilities, including Osaka, Kanagawa Prefecture and a consortium of seven local governments in Nagasaki.

Last Dec 9, 40 legislators in Miyagi's prefecture assembly (which has 61 seats) formed a nonpartisan group to promote the creation of a gambling and entertainment complex.

So what's holding them back? The national Diet. It seems that article 185 of Japan's Criminal Code prohibits gambling, and the Diet would have to draw up and pass a new law to nullify it.

But there have been few moves in this direction, and Japan remains the sole member of the 30-nation Organization for Economic Cooperation and Development without legalized casino gambling.

The secretary to a LDP Diet member tells Weekly Playboy that broad-based support exists for legalization of gambling by both the members of the party in power and the opposition.

"The way things stand right now, the basic plan calls for permitting a maximum of 10 such facilities, with two in operation at the startup," the secretary says, adding that the leading contenders appear to be Okinawa and Osaka. "The problem is gridlock in the Diet. Prime ministers has been turning over at the rate of once a year, and there's the usual interparty bickering. The local governments that support the casinos are bitterly criticizing the Diet as being all talk and no action."

But with the government now in increasingly desperate fiscal straits, casino approval may just be a matter of time.

© Japan Today

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Will they be run like Pachinko Parlors...dealing in cash only and hiding the winnings? The Pachinko owners will fight this tooth and nail.

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Will the pachinko parlors fight this? Of course.

Will the casinos be run like parlors? Unlikely. Parlors use a loophole in the system that allows them to run, even though gambling is considered illegal. If anything, the parlors would run more like casinos if it was legalized.

My only concern in all of this would be if foreign casinos came in, made money and then took it out of Japan. Yes, revenues from taxes could turn into an invaluable source for reconstruction efforts, but at the cost of capital leaving its borders. If measures were put into place to prevent this, then it could be a good thing.

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Life is a gamble,can't outlaw that.

Go for it.

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Hmmmmmm....a way out for those involved in the 'sumo' scandal??? Hmmmmm....

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Gambling creates relatively low-wage jobs.

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well, there is already legalized gambling in the form of pachinko parlors. they also have slot machines. &, if i understand correctly, most of them are owned by the north & south koreans & they do not pay taxes either for some odd reason. also, most of the profits go back to korea, so they don;t help the economy much at all. help korea though for sure.

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Yes, currently it's all the yakuza getting the money from pachinko.

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Gee, yeah, if only they had gambling: mahjong, pachinko, horse racing, bicyle racing, boat racing, Toto, daily, weekly and seasonal lotteries...yeah, if only there was gambling.

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If they legalize it, the should put the casinos in Hokkaido (Winter Wonderland Gambling) and Okinawa (Gambling on the Beach).

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Like the yakuza wasn't going to benefit from all the construction contracts already?

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"If only they had gambling: mahjong, pachinko, horse racing (keiba), bicyle (sic) racing..."

You have forgotten my favourite -- "Autobai"

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No. It will help the owners and it'll give a lot of people crappy jobs, but in the long run it would hurt society far more than make it better.

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That boat racing gambling must be rigged, seems so fake with no real competition.

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Finally Japanese will be able to gamble!! Who will teach them how?

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It seems to work well with other forms of gambling, like stock market, f/x, bond and commodity trading. Those are quite safe because when you lose a large amount, you can get a bailout using public funds.

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Probably the Japanese who want casinos the most are amakudari bureaucrats looking for a cozy golden parachute. There seems to be no way of expunging them from the system. At the other end are compulsive gamblers who will wager their savings and property at the baccarat table. I've known someone like this, who is constantly begging me for small loans. I have long ago declined to support her addiction, but for all I know she's still out in Las Vegas, determined to strike it rich. Gamblers can be just as bad as alcoholics.

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Legalized gambling casinos will surely increase the already high suicide rate.

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There's a better more simpilar way to ease Japan's economic woes and imporve the overall well being of it's citizens. Let's entertain the idea of legalizing Marijuana. Here are just a few points to consider.

The drug generally isn't more harmful than alcohol or tobacco if used in moderation. Limiting the use of the drug intrudes on personal freedom. There are medical benefits such as the those for cancer patients. It could be a source of additional tax revenues. Let medical professionals or others could regulate the quality and safety of drugs. Like sex, alcohol, or cigarettes, marijuana is one of life's little pleasures for some.
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Here is an interesting proposal:

license gamblers. Has anybody ever thought of this?

Given a certain income, a certain knowledge of gaming, and knowledge of hazards of gambling, it might be ok. Don't let poor, stupid or weak people do it, and you can avoid the social disadvantages.

The license fees will be the government's cut... right off the top.

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"Short sighted" is what comes to mind reading this article.

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Last year a Japanese man went to South Korea, lost tens of thousands at the tables, then leapt off of the casino/hotel (7 Luck Lotte Hotel) to his death. Guy just couldn't stop himself.

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Before encouraging casinos, consider quality of life issues for the long term. Study what has happened to cities in other parts of the world after legalized gambling was instituted. The casino infrastructure will displace private property owners. People in nearby neighborhoods may find that they can no longer afford to pay property taxes. Often, large chain hotels and restaurants unfairly compete and many small businesses will disappear. This will happen locally and in the surrounding communities. Police departments will be faced with an increase in crime. This is true because of increased numbers and because of money laundering which often follows casinos. Earthquake-caused problems are ongoing and the outcome is unknown. If something goes wrong, the people will end up paying for a failed operation.

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"If only they had gambling: mahjong, pachinko, horse racing (keiba), bicyle (sic) racing..." You have forgotten my favourite -- "Autobai"

You both forgot boat racing. - Legalising gambling in Japan would be a good thing if it were strictly controlled and monitored, but we all know that would never happen. All pubs and clubs in Australia have poker machines (slots) in them. The impact on the society as a whole is disastrous. I am not a strongly religious person, but gambling is a sin just because of the negative social impacts.

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