Why Japan should regulate online gambling

James Ashton, head of content at FindMyUKCasino.com, shared his thoughts with Focus Gaming News on why lawmakers in Japan should regulate and license online casinos as well as integrated resorts in the country.

The three integrated resorts licences available in Japan has stirred up huge interest in prefectures and cities across the country and among some of the largest gambling operators in Asia. From Osaka to Yokohama and from MGM to Genting Singapore, it seems that the majority of stakeholders want to table proposals to the government for consideration. 

Regulating and licensing integrated reports in Japan is undoubtedly a wise move – in areas such as Macau they have proved to deliver a huge boost to the economy. But to only regulate and license integrated resorts and not to consider extending this to cover online gambling and in particular online casino is to miss a big opportunity. 

The opportunity is not just to open another source of revenue for gambling operators and the government, but to also ensure that players are being properly protected. Concerns are already being raised about the impact IRs will have on problem gambling in Japan.

While the government has taken steps to address these concerns, there are no such measures in place for people accessing online gambling sites.  What’s more, UK online casino sites are now targeting players in Japan – some are even launching dedicated sites offering localised games and payment options. 

While some of these sites hold a UK Gambling Commission licence and are operating to the highest possible responsible gambling standards, others are not.  If the Japanese government was to extend regulation and licensing to cover online gambling sites, it could set rules and requirements that would protect players. 

This would include factors such as requiring operators to undertake ID and know your customer checks to prevent underage gambling. In addition, they could require them to make source of funds checks as part of anti-money laundering and fraud prevention measures. 

Perhaps the most important aspect would be requiring operators to allow players to set limits to stay in control of their play – session, bet, loss, deposit limits can be hugely effective. By not regulating online gambling and not licencing online casino operators, the Japanese government has no control over the sites players from the country access. 

This is why we have seen governments in European markets such as Spain, Italy, Portugal and Sweden regulate the activity over the past few years. 

There are additional upsides to the Japanese government regulating and licensing online gambling and this includes driving tax revenues from sites targeting players in the country. What’s more, by regulating and licensing online gambling, it will help to grow the wider gambling industry within the country, driving employment opportunities. 

Just in the way that awarding IR licences to three prefectures will create thousands of new jobs across the country, the same would apply to a regulated and licensed online gambling industry. 

Job roles that would be created include: 

Legal experts 
Customer support agents 
Platform developers 
Game designers 
IT managers 
Tax and accounting specialists 
Technology experts 

About the regulation in other markets

Of course, regulating and licensing online gambling operators can be tough, and other countries in Asia have struggled to achieve the same levels of success as regulators in established markets. 

Indeed, the UK Gambling Commission, the Malta Gaming Authority and the Gibraltar Gambling Commission are considered to be among the best online gambling regulators in the world. 

If the Japanese government was to consider regulating and licensing online gambling, then it would be well worth the time spent learning from these authorities. 

They have the knowledge, experience and expertise to help other countries, governments and lawmakers design, develop and deploy their own regulatory frameworks. 

These frameworks would be relatively easy to sign into law and would sufficiently protect players while allowing the government to boost employment and increase tax revenues. 

This, combined with the emergence of licensed integrated resorts across the country, will establish Japan as a forward-thinking and a truly progressive global gambling destination.