JAPAN Law and Practice Contributed by: Masayuki Fukuda, Nagashima Ohno & Tsunematsu
4.2 Regulatory Approach An IR Area Implementation Plan shall be approved by the Minister of Land, Infrastructure, Transport, and Tourism, and a casino business operation needs to obtain a licence from the Commission. The IR busi- ness operator shall file financial statements on a yearly basis and reports on a quarterly basis with the Minister of Land, Infrastructure, Transport, and Tourism. Thus, basically, Japan’s regulatory system is structured based upon a traditional “prescriptive” approach. On the other hand, the Minister shall evaluate, notify and publish the status of the implementation of the IR Area Implementation Plan, and the approved munici- pal body and the IR business operator shall appro- priately reflect the result of such evaluation upon the improvement of their business operation to be made in accordance with the IR Area Implementation Plan. In that sense, the regulations of the IR Implementa- tion Law are partially structured on a “risk-based” approach. On 22 July 2022, the Japan Casino Regulatory Com- mission issued the Criteria of Examination for Granting Casino Business Licences, etc, under the IR Imple- mentation Law and the subordinate Operational Guideline for Examination of Casino Business Licenc- es, etc. The examination will be made by the Commis- sion from various perspectives such as the applicant’s capability of appropriate operation of a casino busi- ness and having sufficient social credibility (including no relationship with a mob/gangsters), social cred- ibility of the officers and directors and shareholders of the applicant, financial soundness (sufficient net worth will be required) and good prospect of the result of income and expenditure of the casino business (with reasonable grounds underlying such prospect), suf- ficient measures for preventing problem gambling (specific measures for restricting problem gamblers’ use of the casino will be required), anti-money laun- dering (specific KYC procedures will be required), and other viewpoints. The above criteria also stipulate the method of calculation of gross gaming revenue (GGR), the criteria for approval of execution of casino business-related contracts (for delegation purposes or otherwise), and certain other matters.
4.3 Types of Licences Under the IR Implementation Law, casino business licences may be granted only to IR operators that operate a complex mixture of facilities, such as con- vention centres, recreational facilities, tourist facilities and accommodation facilities, as well as casinos that are authorised by the Minister of Land, Infrastructure, Transport, and Tourism. In other words, a standalone casino business operator (non-IR operator) will not qualify as a licensed casino business operator. As a result, casino services may be provided only within IR areas implemented under the IR area implementation plan authorised by the Minister of Land, Infrastructure, Transport, and Tourism. Besides, certain types of IR/casino-related business operators other than casino business operators will need their respective authorisations to conduct such businesses under the IR Implementation Law. For example: • a casino facility provider must obtain a licence from the Commission if it intends to manage and lease casino facilities to a casino business operator; and • the owner of any land that is used for IR/casino facilities shall obtain permission from the Commis- sion if it transfers or leases the land to an IR/casino business operator. The rent of lease of such casino facility or land shall be determined in a fixed amount since it is prohibited for a casino business operator to execute a contract for which the amount of consideration is determined in proportion to the GGR. Furthermore, to ensure the sound operation of casino businesses, casino-related equipment providers must obtain the approval of the Commission if they wish to manufacture, import, or sell casino-related equipment. Since the quality and functionality of casino-related equipment affects the sound operation of casino businesses, casino-related equipment providers shall comply with technical standards for casino equipment as determined by the Commission. Casino-related equipment providers also have to pass an inspection of electromagnetic casino-related equipment that is conducted by the Commission, and examine non- electromagnetic casino-related equipment on their
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