Japan’s Crackdown on Online Casinos: Legal Repercussions and Regulatory Shifts

The Illegality of Online Casinos in Japan

Under Japan’s current legal framework, all forms of unauthorized gambling are strictly prohibited, including online casinos operated from abroad. The Penal Code of Japan criminalizes most gambling activities, with only a few state-sanctioned exceptions such as pachinko, horse racing, lotteries, and sports betting under special licenses. Despite this, many Japanese citizens continue to access offshore online casinos, exploiting legal grey areas and the lack of direct enforcement against players.

Increased Enforcement Against Players and Operators

In recent years, the Japanese government has begun tightening enforcement efforts, not only targeting operators of illegal gambling sites but also players. In several high-profile cases, Japanese nationals were arrested and fined for gambling on overseas platforms, even if the operators themselves were based outside of Japan. These incidents underscore a significant shift in enforcement policy — no longer focusing solely on suppliers but extending penalties to end users.

Police Raids and Arrests on the Rise

Throughout 2024 and into 2025, police raids have become more common across multiple prefectures, targeting both domestic facilitators of illegal online gambling and individuals who consistently participate. In some cases, cybercrime units have tracked financial transactions, particularly cryptocurrency transfers, linking players to specific platforms. Arrested individuals have faced criminal charges under Article 185 of the Penal Code, with penalties including imprisonment and substantial fines.

Legal Grey Zones Exploited by Offshore Operators

One of the biggest challenges in enforcement is the cross-border nature of online gambling. Many casinos operate legally in jurisdictions such as Malta, Curacao, or the Philippines, offering Japanese-language platforms and accepting Japanese yen or crypto payments. While these platforms claim to operate legally under international law, their services remain illegal in Japan. However, due to jurisdictional limitations, Japanese authorities have focused primarily on discouraging domestic access through ISP blocking, payment restrictions, and user education campaigns.

Government Moves Toward Stricter Regulation

There is growing political momentum in Japan to reform gambling laws and explicitly ban online casinos through legislative amendments. The National Police Agency (NPA) has submitted multiple reports recommending stricter penalties and stronger monitoring capabilities, including cooperation with international enforcement agencies. Legislators are also considering laws that would require ISPs to block access to known illegal gambling sites, following models used in South Korea and China.

Financial Institutions Under Scrutiny

In addition to targeting players and platforms, the Financial Services Agency (FSA) has increased pressure on banks and fintech services to monitor and restrict transactions linked to gambling. Japanese credit card companies, e-wallets, and crypto exchanges have been urged to implement stricter Know Your Customer (KYC) protocols to detect and prevent illegal gambling-related payments. As a result, some financial institutions have begun suspending accounts flagged for repeated use with known online casino merchants.

The Impact on Players and Affiliates

With the tightening crackdown, both casual gamblers and professional affiliates are at risk. Online casino affiliates, who earn revenue through referral traffic, are now facing legal exposure for promoting illegal platforms within Japan. Several marketing websites have been shut down, and operators fined under laws prohibiting the facilitation of illegal activity. Players, on the other hand, are being urged to cease participation, with public awareness campaigns highlighting the legal risks and potential for prosecution.

The Future of Online Gambling in Japan

While Japan has recently embraced legal gambling through the opening of integrated resorts (IRs) and casino resorts, these developments are tightly controlled and restricted to physical locations. The online space remains firmly prohibited, and government authorities show no indication of liberalizing access to internet-based gambling. Instead, Japan is likely to follow the path of stricter regulation, surveillance, and international cooperation to combat the growing popularity of offshore online casinos.

Conclusion

Japan’s crackdown on online casinos marks a clear escalation in its stance against unauthorized gambling. By targeting players, affiliates, and financial transactions, the government is sending a strong message that online casino activity will not be tolerated — regardless of where the platform is based. As enforcement continues to tighten, those involved in the online gambling ecosystem should be aware of the increasing legal risks and take steps to disengage from these prohibited activities.