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Turning Japan into a global gambling hotspot may be just the ticket for Abenomics

The world’s biggest gambling company has vowed to spend “whatever it takes” (up to $10 billion) to set up a casino in Japan. Las Vegas Sands CEO Sheldon Adelson’s pledge comes at an auspicious time, with the Japanese government considering legalizing casinos and in desperate need of an economic boost.

Analysts say Japanese casinos could bring in as much as $40 billion a year, which would make Japan the world’s second most lucrative gambling market, behind only Macau. Japanese consumers already pour tons of money into lotteries, horse races, and pachinko, a pinball-like game that’s believed to account for almost 30% (paywall) of the country’s leisure spending.

Legalizing casinos might even loosen the Japanese mafia’s hold on the country’s underground gambling industry, made up of as many as 1,000 illegal operations, from tele-casinos to mahjong to baccarat tables. The government already succeeded once in phasing the yakuza out of the pachinko industry, and now lawmakers are trying to keep the yakuza out of any new legalized casino industry by setting high hurdles for ownership. Some have proposed setting up a separate cabinet-level body, independent of any one ministry, to regulate the industry. (Though Japanese ministers have been known to fall under yakuza influence from time to time.)

Still, it may be that Japan’s new gambling industry will follow that of Macau’s. The Triad, Hong Kong’s longstanding organized crime force, has been incorporated into the legal casino industry, where it plays a smaller role of helping run gambling junkets for wealthy Chinese mainlanders.

In the meantime, Japan’s legislature is considering a gambling bill (paywall), backed by prime minister Shinzo Abe’s Liberal Democratic Party, that would start licensing casinos in 2016, with the goal of having at least one giant complex in operation by the 2020 Tokyo Summer Olympics. Let the games begin.

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