The local governments of Osaka and Nagasaki in western Japan have long sought approval to build "integrated resort" (IR) facilities combining casinos, convention centers, hotels, restaurants and entertainment venues.

The Osaka plan, which aims to open the casino by 2029, was approved after "sufficient examination from various perspectives", land and transport minister Tetsuo Saito told reporters.

Prime Minister Fumio Kishida praised the move, saying the complex would help development in the region and "become a tourism base that will disseminate the charm of Japan to the world".

Japan was long the only developed nation that banned casinos but passed legislation in 2016, paving the way to make the industry legal.

And in 2018, parliament enacted a law allowing the construction of IR facilities.

Critics warn that approving legal casinos could worsen the country's already significant gambling problem.

"We have grave concerns about the decision", a pair of NGOs that deal with gambling addiction said in an open statement to government officials.

The groups pointed to a surge in requests for help from young people addicted to gambling via smartphones and illegal online casinos, adding the public would be better served by stronger anti-addiction measures than the casino's approval.

A 2021 government survey found about 2.2 percent of the population, or 2.8 million people, were affected by gambling addiction.

Many are hooked on the pinball-like game "pachinko" or on "pachislo" slot machines, which together annually generate 14.6 trillion yen (US$110.2 billion) in revenue as of 2021.

About 7,600 parlors hosting one or both of the games dot the nation, many readily accessible near train stations, using legal loopholes to let winners exchange tokens for cash.

Japan also has a multi-trillion-yen market for government-controlled races of horses, motorcycles, boats and bicycles, along with football betting and a lottery.

The government says any IR complex seeking approval will have to submit its plans to prevent gambling addiction.

The IR law also stipulates Japanese citizens will be required to pay 6,000 yen for every 24 hours in a casino.

That fee will be split between the local and national governments, with a portion of funds directed towards anti-gambling addiction measures, according to an Osaka official who declined to give his name.

There was also a cap on the number of visits to a facility by Japanese citizens, and family members could request a relative be banned from entering a casino, Saito noted.

The Osaka IR will be run by a company led by MGM Resorts International's Japan unit and financial services company Orix, in consortium with around 20 local companies.

In addition to casinos, the complex will include three hotels with a combined 2,500 rooms, an international conference hall and exhibition facilities.

The Osaka government estimates the IR's economic impact at an annual 1.14 trillion yen, with 15,000 jobs created inside the facilities.

It expects a total of 20 million visitors annually from inside and outside Japan, with sales of 520 billion yen, 80 percent of which would come from casinos.