A subcommittee of the government's Tax Commission started discussions Friday on whether to legalize casinos.
Author Naoki Inose, who proposed the move at a subcommittee meeting, told a news conference it would expand the taxation base and help local governments secure greater revenues.
Inose said legalization could also help stimulate consumption, as casinos are expected to be operated in newly constructed areas where hotels and shopping centers are located.
He said Japan is the only major industrialized country that has not legalized casinos.
Hiromitsu Ishi, chairman of the tax panel, said that other members are mostly in favor of discussing the issue.
"I also personally think the issue deserves full discussion," he said.
Some prefectural governors, including Tokyo Gov. Shintaro Ishihara, have been calling for legalization of casinos to boost tourism.