Japan’s Gambling Market in 2024: Current Landscape and Future Growth

Japan is a country steeped in tradition and a wildly broad spectrum of tastes that include everything from traditional values to some of the most progressive fetish entertainment industries in the world. When it comes to gambling, the country has taken a traditionally conservative stance, outlawing most forms of it save for a few narrow sectors open to locals under strict regulation and tourists more freely.  

As a measure of its current and future gambling market, here’s a look at Japan’s current gambling market, its projected growth, and the factors influencing its development.

Current Market Size and Composition

Currently, in 2024, Japan’s gambling market has been diverse, encompassing traditional forms like pachinko and horse racing, as well as emerging online platforms. The online gambling sector, in particular, has seen notable growth. According to Statista, revenue in Japan’s online gambling market is projected to reach $6.19 billion in 2024, with an expected annual growth rate of 4.92% from 2024 to 2028, potentially reaching $7.50 billion by 2028.

The online gambling sector in Japan is, however, surging. Per the Imarc Group, by 2023, the market had grown to be worth $7.7 billion. It’s expected to exhibit a compound annual growth rate (CAGR) of 5.5% between 2024 to 2032—potentially reaching up to $12.6 by then. 

This surge is attributed to increased internet accessibility, smartphone penetration, and a shift in consumer behavior towards digital platforms. However, according to iGaming expert Hiroko Ishihara, many of the best online casinos for Japanese gamblers are actually found via offshore sites since the market is tightly regulated in the country. 

However, these offshore platforms provide a wealth of enticing benefits like generous bonuses, instant withdrawals, and a wider range of games. As they can be accessed by Japanese players despite being licensed overseas, the sites themselves are legal and keep to international standards of fairness and security while being available to Japanese players in a legally gray manner. 

Traditional Gambling Forms

On the other hand, traditional gambling activities in Japan are a lot easier to play. Types like pachinko, lotteries, and horse racing are embraced and legal in the country—though subject to very strict regulation. In horse racing, in particular, Japan is held in high esteem among the global industry. This is because of their fine reputation for producing some of the best thoroughbreds in the world.     

To this day, there are numerous parlors operating nationwide. Horse racing, managed by the Japan Racing Association (JRA), also attracts a substantial number of bettors. In 2023, the JRA reported a betting turnover of approximately ¥2.8 trillion, indicating the enduring appeal of horse racing among Japanese gamblers.

In contrast, pachinko, a game resembling pinball, remains immensely popular. Lotteries, on the other hand, are highly popular and widely available, with proceeds often funding public projects. Managed by local governments, they offer a legal, regulated form of gambling enjoyed by many citizens.

Sports Betting Expansion

The world over, online sports betting has become a big deal and now operates in a global industry worth billions. This is in addition to the glamor of it as the major players and teams continue to sign massive sponsorship deals that make the biggest brands more visible than ever throughout every conceivable market in the world that embraces sports. 

Sports betting is a significant component of Japan’s gambling market. The online sports betting segment is projected to reach $4.08 billion in 2024, with an annual growth rate of 5.06% from 2024 to 2028, potentially reaching $4.97 billion by 2028. This growth is fueled by the popularity of sports like football, baseball, and horse racing, as well as the increasing acceptance of online betting platforms.

Regulatory Environment

Japan’s gambling regulations are evolving. For a long time, it had taken a strict and zero-tolerance approach toward aspects of gambling like casinos and iGaming. The government has been cautious about legalizing online casinos, focusing instead on integrated resorts that combine casinos with hotels and entertainment facilities. In April 2023, the Osaka casino plan was approved, aiming to open in 2029, signaling a shift towards a more regulated gambling environment.

This move is likely to reshape the gambling market in Japan as these resorts are likely to become a major attraction for the nation’s already bustling tourism industry. With Japan’s sterling reputation for amazing attractions, it’s likely their casino resorts will end up being one-of-a-kind technological wonders. 

Technological Advancements

Speaking of technology, innovations from the tech industry are reshaping Japan’s gambling market. The proliferation of smartphones and high-speed internet has made online gambling more accessible. 

Additionally, advancements in virtual reality (VR) and augmented reality (AR) are enhancing the gaming experience, attracting a younger demographic to online platforms. The integration of blockchain technology is also improving transparency and security in online transactions, building trust among users.

Consumer Behavior and Demographics

Consumer preferences in Japan are shifting towards online gambling due to its convenience and variety. The younger generation, familiar with digital platforms, is more inclined to engage in online betting and gaming. 

The average revenue per user (ARPU) in Japan’s online gambling market is projected to be around $630.90 in 2024, indicating a high level of engagement among users. With worldwide online gambling revenue soaring, this is in line with modern trends elsewhere too as the world moves closer toward a more digitized future. 

Economic Impact

The growth of the gambling market contributes to Japan’s economy through job creation, tax revenue, and tourism. The development of integrated resorts is expected to boost tourism and create employment opportunities. 

Japan is currently planning to strictly regulate how tourists can access these facilities and if locals will be able to at all. It’s likely that whatever regulatory regime is later adopted will be measured and include a balanced way of opening up the economic potential of gambling while ensuring the social integrity of the nation remains as respected as it is.   

Challenges and Considerations

Despite the positive growth trajectory, Japan’s gambling market faces challenges. Regulatory uncertainties, particularly concerning online gambling, create a complex operating environment for operators. Additionally, the prevalence of illegal offshore gambling platforms poses competition to legal operators and raises concerns about consumer protection. Addressing these challenges requires a balanced approach that promotes growth while safeguarding public interests.