Gambling Laws in Asia Adam Shapiro
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Penn State International Law Review Volume 29 Article 7 Number 2 Penn State International Law Review 9-1-2010 Hold 'em or Fold 'em: Gambling Laws in Asia Adam Shapiro Follow this and additional works at: http://elibrary.law.psu.edu/psilr Part of the International Law Commons Recommended Citation Shapiro, Adam (2010) "Hold 'em or Fold 'em: Gambling Laws in Asia," Penn State International Law Review: Vol. 29: No. 2, Article 7. Available at: http://elibrary.law.psu.edu/psilr/vol29/iss2/7 This Comment is brought to you for free and open access by Penn State Law eLibrary. It has been accepted for inclusion in Penn State International Law Review by an authorized administrator of Penn State Law eLibrary. For more information, please contact [email protected]. Hold 'em or Fold 'em: Gambling Laws in Asia Adam Shapiro* I. GAMBLING'S NEXT BIG WAVE Asia is considered one of the world's most expanding markets for the global casino industry.' Asian casinos, as well as gambling in general, are growing at one of the fastest paces in the world.2 As Asia arises from poverty to affluence, more countries in Asia are becoming middle-income countries, providing people with more money to spend on entertainment. This Comment will look at what the change or creation of gambling laws means for Asian countries. Parts II through V of this Comment will analyze the gambling laws and the process of casino legalization in four major Asian countries: Japan,4 Taiwan, China,6 and Russia. Japan is considering legalizing casinos in a future bill.8 Taiwan passed a referendum in 2009 which failed to meet the public vote, but is ready for yet another vote in 2010.9 China has had casinos in its territory of Macau since 2002.10 Russia legalized casinos in 1988" but in 2009 decided to * J.D. Candidate, The Dickinson School of Law of the Pennsylvania State University (2011). 1. See Paul Wiseman, Legalized Gambling Branches out Across Asia, USA TODAY, May 3, 2007, available at http://www.usatoday.com/travel/destinations/2007-05-03-asia- casinos-usat N.htm. 2. See id. 3. See id. 4. See infra Part 11for a discussion on gambling in Japan. 5. See infra Part III for a discussion on gambling in Taiwan. 6. See infra Part IV for a discussion on gambling in China. 7. See infra Part V for a discussion on gambling in Russia. 8. See James Kilsby, Political Uncertainty Rattles Japan's Casino Hopes, GAMBLINGCOMPLIANCE, Sept. 15, 2008, available at http://www.gambling compliance.com/node/19312/. 9. See Taiwan keeps door on Casinos Open, THE MALAYSIAN INSIDER, Oct. 9, 2009, available at http://themalaysianinsider.com/index.php/business/39747-taiwan- keeps-door-on-casinos-open-. 10. See Macau Law no. 16/2001, art. 1 (Legal Framework for the Operations of Casino Games of Fortune). 385 386 PENN STATE INTERNATIONAL LAW REVIEW [Vol. 29:2 ban most forms of gambling and limited them to the four empty corners of the country.12 Part VI will examine the legislative intent of gambling laws in these Asian countries with a focus on the goals of economic development, promotion of tourism, and social stability, and on whether these goals can actually be achieved.'3 Legislative intent and actual results will be shown to be often quite different.14 Part VII of this Comment discusses the significant impact on the legal world of these Asian countries as gambling laws change.' 5 These changes will require other laws and regulations to be changed, and will create a new burden on the court system of many of these countries.16 Part VIII recognizes the experience that America has had with gambling laws and regulation and how America can provide good guidance and serve as a model to these Asian countries as they encounter similar problems.' 7 These problems include creating new gambling regulation authorities, crime, and lawsuits that will be brought to the courts.' 8 Part IX provides a discussion of ways to achieve the goals of gambling and casino laws while minimizing the consequences.19 This is done by looking at successful casino systems around Asia and Europe and how they have solved many different problems created by these laws.20 This Comment concludes that in making the decision to legalize or ban gambling, each country must be analyzed individually for whether it has the proper means to attain its goals. 11. See PROBLEM GAMBLING IN EUROPE 247 (Gerhard Meyer, Tobias Hayer, Mark Griffiths eds., 2009). 12. See On State Regulation of Gambling and Introduction of Amendments to Certain Legal Acts of the Russian Federation, 297 Ros. Gaz. 244. (Dec. 29, 2006), available at http://www.glin.gov/view.action?glinlD=197681 [hereinafter State Regulation of Gambling]. "Gambling zones are being created in four administrative districts: Altayskiy Kray, Primorskiy Kray, Kaliningrad Oblast, and jointly in Krasnodarskiy Kray and Rostov Oblast. In each of these four administrative districts, only one gambling zone may be created." K. Skopchevskiy, Russia Reshapes Its Gambling Industry, CIS LEGAL NEWSWIRE, June 15, 2008, at 6-7. 13. See infra Part VI. 14. See infra Part VI. 15. See infra Part VII. 16. See id. 17. See infra Part VIII. 18. See id. 19. See infra Part IX. 20. See infra Part IX. 2010] HOLD 'EM OR FOLD 'EM: GAMBLING LAWS IN ASIA 387 II. JAPAN "The Japanese are known in Las Vegas as prized customers, top rated quality players, and high rollers." 21 There are almost 20,000 gambling halls spread throughout Japan.22 This should be an odd statistic considering that gambling is illegal in Japan. 23 A. JapaneseLaw on Gambling Under Article 185 of the Japanese Penal Code, "a person who gambles shall be punished by a fine of not more than 500,000 yen24 or a petty fine; provided, however, that the same shall not apply to a person who bets a thing which is provided for momentary entertainment." 25 What counts as momentary entertainment is unclear. This lack of clarity allows Japan to liberally apply Article 185, and has significant consequences in the Pachinko Industry. 26 Under Article 186 of the Japanese Penal Code, the punishments are stricter. 27 Under article 186, "a person who habitually gambles shall be punished by imprisonment with work for not more than 3 years." 28 "A person who, for the purpose of profit, runs a place for gambling or organizes a group of habitual gamblers shall be punished by imprisonment with work for not less than 3 months but not more than 5 years." 29 Despite these strict statutes, gambling flourishes in Japan.30 B. Japan 's Pachinko Paradise Japan has a $250 billion per year pachinko business.3 ' Pachinko, a game that would be considered gambling in any other country, is 21. INTERNATIONAL CASINO LAW 3RD EDITION 518 (Anthony N. Cabot, William N. Thompson, Andrew Tottenham & Carl Braunlich eds., 1999) [hereinafter INTERNATIONAL CASINO LAW]. 22. See id. 23. See KEIHO, art. 185, para. 1. 24. As of January 24, 2010, the current exchange rate was around 90 yen to $1. See Exchange Rates Table for Japanese Yen, Japan, http://www.x-rates.com/d/JPY/table.html (last visited Jan. 24, 2010). 25. KEIHO, art. 185, para. 1. 26. See INTERNATIONAL CASINO LAW, supra note 21, at 518. See infra Part II. B. for a discussion of the Pachinko industry. 27. KEIHO, art. 186, para. 1, no. 1. 28. Id. 29. Id. at art. 186, para. 1, no. 2. 30. See generally INTERNATIONAL CASINO LAW, supra note 21, at 518. 31. See Wiseman, supra note 1. 388 PENN STATE INTERNATIONAL LAW REVIEW [Vol. 29:2 considered to be no more than adult entertainment in Japan.32 The Penal Code allows for this with an "entertainment" 33 loophole in Article 185. Pachinko is a Japanese gaming machine that is a combination of a slot machine and pinball. 34 The player purchases the balls and puts them in the machine, being able to control nothing but the speed of the balls that are put into the machine. 35 Most balls disappear, but a few find their way into specially designed places similar to pinball.36 Once this happens, an electronic slot machine then appears on the screen.37 If there is a match, new balls are won. 38 The Japanese are able to include pachinko under the Penal Code's "entertainment" provision because winners receive prizes rather than cash, and there is an alleged element of actual skill, as opposed to just chance.3 9 The balls are traded for a prize that the winner can select.4 0 Included among the prizes are packages containing pieces of gold or silver. Winners can then take their prizes to designated exchange shops, which are conveniently located near pachinko parlors. 4 1 At the exchange shops the prizes can be exchanged for cash.42 Therefore this is not gambling for money, but rather just being entrepreneurial with one's prize winnings. The current view in Japan is that Pachinko is not played by people who are seeking recreation, but by people who are trying to and think they can make a lot of money.4 3 If other types of casinos are legalized and built in Japan, there is a good chance that the Japanese will view them in similar ways. C. Japan'sLotteries Lotteries, another type of gambling, have existed in Japan as early as the 1600s.44 Lotteries have been banned and revived repeatedly throughout Japan's history. 4 5 A major reason that the Shogunate 46 32.