Gamblers in Japan are still awaiting the country’s long promised casino legislation, which seems to be encased in the same block of ice from which Godzilla emerged. But gamblers continue to seek out alternatives, such as the illegal online gambling operation Tokyo Metropolitan Police shut down this week. Officers said the operation in Shibuya Ward provided access to computers linked to an overseas website offering baccarat. The business reportedly earned ¥15m (US $148k) in the one month it was operational. Three individuals were arrested, including the manager, who the Tokyo Reporter said admitted his guilt thusly: “I worked to make a living.”
Working for a living is how a Japanese court has described an avid horse bettor’s wagering activities. On Thursday, the Osaka District Court ruled that horserace betting slips count as a legitimate business expense, provided you gamble like you mean it. The case originated when tax authorities claimed an Osaka man owed them ¥570m ($5.6m) for not declaring some ¥2.88b ($28.4m) in winning horse wagers between 2006 and 2009.
In a ruling that could have a significant impact on other gambling tax cases in Japan, Judge Masaki Nishida stated that the 39-year-old bettor had “purchased betting slips on a continuous basis, and this can be considered not only leisure, but also a profit-making activity.” As such, the entrepreneur had a right to deduct the cost of his losing betting slips as a business expense, which reduced his tax obligation to about a tenth of what the taxman had been seeking. The Japan Times reported that the bettor, who was given a two-month suspended sentence, has no plans to appeal the verdict.
The case has parallels with Punters Club member David Walsh, who recently faced a $37.7m back tax claim from Australian tax authorities because they said Walsh’s horse wagering activities were clearly run as a business. Walsh eventually settled for an undisclosed amount.