JAPAN Law and Practice Contributed by: Masayuki Fukuda, Nagashima Ohno & Tsunematsu
1. Introduction 1.1 Current Outlook and Recent Changes The Integrated Resort (IR) Promotion Law (the “IR Promotion Law”) and the IR Implementation Law (the “IR Implementation Law”, collectively with the IR Promotion Law, the “IR Laws”) were enacted in 2016 and 2018, respectively. Until then, the operation of gambling activities by the private sector, either in digital or land-based form, had been prohibited as criminal offences under the Penal Code. Pachinko (a vertical pinball-like gaming machine) and pachi-slot (a slot-machine-like gaming machine) have had cer- tain popularity in Japan since the Second World War but the legality of these gaming machines has long been discussed. Under the IR Laws, gambling activi- ties conducted by licensed casino business opera- tors within approved land-based IRs are legalised, but initially only one IR area (Osaka) has been approved by the Minister of Land, Infrastructure, Transport, and Tourism. Meanwhile, even after the enactment of the IR Laws, online gaming activities are still prohibited under the Penal Code and it will be illegal to conduct such activi- ties within Japan. As mentioned in 1.1 Current Outlook and Recent Changes , online gaming activities are prohibited under the Penal Code and will not be legalised even after the enactment of the IR Laws since the IR Laws legalise only gambling activities conducted in land- based casino facilities located within an IR area. According to a statement regarding online gambling published by the national government on 1 November 2013 (as a response to an enquiry from a member of the Diet), if all or part of the activities in “running a gambling place for the purpose of gaining profit” are undertaken within Japan, they may constitute a crime of “running a gambling place for the purpose of gaining profit” under the Penal Code. Exception- ally, betting on land-based horse races, bicycle races, 2. Jurisdictional Overview 2.1 Online Gambling Betting/Bingo/Casino/Lotteries
motorcycle races, motorboat races, and lotteries that are operated by the national government, municipal bodies, and/or other public sectors (including the sports promotion lottery toto/BIG issued by the Japan Sports Council under the supervision of the Ministry of Education, Culture, Sports Science, and Technol- ogy) may be performed on an “online” basis. Mean- while, recently, there is a view that if an offshore online casino operator enables Japanese users to access and use online games in Japan, such offshore online casino operator’s act may constitute a gambling-relat- ed crime under the Penal Code. Fantasy Sports If a user pays a participation fee to the operator and prize money is paid from such participation fee, it may constitute a form of betting that amounts to a crime of gambling (ie, betting values in respect of an uncertain event to compete for winning or losing such values) under the Penal Code. Using skill in composing fan- tasy teams may not totally negate fantasy sports’ bet- ting nature. Meanwhile, if prize money is provided only by a third-party sponsor, it will be legal. Social Gaming There are no laws specifically regulating the social gaming industry. However, the Computer Entertain- ment Supplier’s Association (CESA), a self-regulating organisation that merged with the Japan Social Game Association (JASGA), issues guidelines regarding real money trade (RMT) and gacha (ie, an online random item provision machine similar to a “loot box”). In addition, excessive prizes might be banned by the Consumer Affairs Agency or the Japan Fair Trade Commission under the Act against Unfair Premiums and Misleading Representations (the “Unfair Premium Act”). More specifically, under the Unfair Premium Act, the amount of a prize may not exceed the lower value of: • 20 times the value of the transaction; or • JPY100,000. Esports Similar to fantasy sports, if a participant pays a reg- istration fee to the event organiser and prize money is paid from such registration fee, it may constitute a
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