A draft plan for legalizing casinos in Japan calls for the establishment of a strong, independent regulatory authority modeled on Nevada and Singapore.
As political momentum builds to bring baccarat, roulette and blackjack to the world’s third-largest economy, keeping out organized crime—the country’s infamous yakuza—is a big concern for the Diet’s pro-casino caucus, which is reported to have the backing of popular Prime Minister Shinzo Abe.

As a policy paper leaked to select media outlets states,“The hurdles to enter the business should be set high. It should not be easy for anyone to get a licence and participate in the industry. With proper regulation and enforcement of the law, there is absolutely no reason for casinos to become hotbeds of criminal activity.”
The paper recommends stringent checks on the “suitability” of the people and businesses involved, with directors and senior executives of licensees required to provide bank account, credit card and tax records for themselves and their families going back 10 years.
As a safeguard against corruption, the regulatory body would be attached to the Cabinet and not part of any ministry—a provision designed to head off a longstanding custom known as amakudari under which ministry officials retire to comfortable sinecures in the industries they once regulated. 

All the caution comes for good reason, because legalization is believed to enjoy the best chance it’s ever had of becoming reality in the world’s largest untapped market. It’s a prospect that has tantalized global gaming operators for years, only to be sidelined by political instability and the inherent conservatism of Japanese society. But pro-casino forces say this time is different. Abe’s business-friendly Liberal Democratic Party is firmly in control of both houses of the Diet, and the prime minister, whose approval ratings are strong, supports resort-scale gambling as part of his strategy for reviving the country’s long-stagnant economy. 
Both he and Deputy PM Taro Aso are official advisors to the casino caucus. Tokyo’s recent selection to host the 2020 Summer Olympics may prove the clincher. The country will be spending an estimated US$1.53 billion on venues to stage the games, and investment from the gaming industry could go a long way toward providing the needed hotel space and attractions for the thousands of expected visitors.
Given Japan’s worldwide appeal as a tourist destination and a large and relatively affluent population with a proven propensity to gamble—the pinball-like machine games pachinko and pachislot alone account for an estimated 10 trillion yen ($192 billion) in wagers a year, equal to 30 percent of the country’s annual leisure spend— analysts estimate a market consisting of two resort-scale casinos, one each in Tokyo and Osaka, could generate US$10 billion – US$15 billion in gaming revenue out of the gate, which likely would catapult the market to the second-largest in the world after Macau.
That’s about five to six years away, according to the best estimates. 
Analysts expect a two-stage process to unfold, with a bill endorsing the integrated resort concept introduced and passed later this year, or more likely early in 2014, followed in about a year by legislation establishing the legal and regulatory framework. Individual prefectures would then bid for the right to host integrated resorts (IRs), two of which are expected to be awarded to the big cities, probably Tokyo and Osaka, and two licenses to smaller ones. Assuming this happens by 2015 or 2016, a three-year construction timetable suggests the first resort could open in 2019 or 2020 at the latest, in time for the Olympics.
Sources close to the legislative process expect the tax on gaming revenues to approximate a blended 20 percent, which compares very favorably to Macau’s 39 percent and the Philippines’ 15 and 27 percent on VIP and mass-market play, respectively, and not unfavorably with Singapore’s 12 percent on VIP play and 22 percent on mass.
Not surprisingly, an A-list of global heavyweights have begun scouting development sites and negotiating with prospective Japanese partners—Mitsui, Mitsubishi, Itochu and machine gaming giants Sega Sammy and Konami reported to be among them. 
Las Vegas Sands and Macau casino giant have been looking at land in and around Tokyo and Osaka. Wynn Resorts says it would consider investing upwards of US$4 billion. MGM Resorts International similarly is talking about “several” billions. Macau’s Melco Crown International, which also is spending more than US$1 billion in Manila, has thrown out $5 billion. Caesars Entertainment and Malaysian leisure conglomerate Genting are believed to be keen as well.