Casino Legalization in Japan: Are the Economic Impacts Greater than the Social Costs? Japanese culture has always seen gambling as taboo. They see gambling as an activity that leads to social issues such as addiction, crime, and broken relationships. Currently, most forms of gambling in Japan are outlawed, but as Japan’s views on gambling change, the government is considering legalizing casinos. Japan would like to have the gaming industry present for tourists during the 2020 Summer Olympics in Tokyo (Einhorn). Many details of the bill are still being worked out but Japan’s new liberal Prime Minister, Shinzo Abe, has been working hard to get the bill off the ground so the casinos would be here in time for the games. The Asian markets for casinos have been on fire in the last decade as Macau, the gambling hub of the world reported seven times the annual gaming revenue produced in Las Vegas last year (Stutz). It is not surprising that analysts are predicting Japan to be the next big casino market with estimates of it becoming a 40 billion dollar industry (Detar). With an industry that could bring in that kind of money, Japan’s economy would clearly benefit from the bill, but some people still argue that it is not worth the social costs. The legalization of casinos in Japan would be beneficial to its citizens because the legalization of casinos provides economic benefits that reduce more societal problems than the act of gambling creates. First of all, the government of Japan will be able to put a hefty tax rate on gambling, which will greatly increase its tax revenue. While the details of the tax rate on gambling revenue for Japan have not yet been released, it is expected that tax rates will be similar to the casino market in Macau who charges a tax rate of 35% on the gross gambling revenue per year (“UNLV Center For Gaming Research”). If Japan used the same tax rate and becomes the 40 billion dollar industry that analysts predict, the revenue generated in taxes would be 14 billion dollars. The revenue made from this gambling tax would then give the Japanese government many opportunities to fund programs that would further grow the economy or social programs that would benefit its citizens. There are many things the government can do with taxes to promote economic growth. They can invest it in programs that are beneficial to Japan’s citizens such as the military, charities, education, or even into programs that treat problem gamblers.
In particular to Japan, the government could use the tax revenue to put together a spending package that would help reconstruct areas affected by the 2011 earthquake and tsunami. The economy has recovered since that time, but some areas, such as the Tohoku region, are still not the same. This region has historically been important for Japan’s manufacturing industry, which took a great hit when the natural disasters occurred (Waldneberger and Eilker). Implementing this spending package would positively impact Japan’s economy in employment, GDP, and corporate expansion. This is just one of the many things the government could do with the tax revenue to benefit it’s citizens. The point of this hypothetical example is to show how the tax revenue casinos generate could positively benefit many citizens of Japan. There are endless social programs and economic plans the government could implement when taxing on a potential 40 billion dollar industry. Some see the tax revenue alone as a good enough reason for the government to legalize casinos. To further the point that legalization of gambling in Japan will promote economic growth, companies seem to be lining up to build luxury casinos in Japan. With so much interest from multinational companies, Japan should be excited about all the positive impacts they can make on their economy. Jim Murren, the CEO of MGM resorts, a company that owns luxurious casinos across the world, predicted, “Japan could be the