Japanese casinos could mimic the Singaporean model which allows tourists to enter for free, while natives have to pay up to $100 to gain admittance.
The idea comes from a government planning committee, also tasked with allocating casinos to three regions in Japan ahead of the 2020 Tokyo Olympics.
Osaka, Okinawa and Yokohama are the most likely destinations according to the Nikkei newspaper, with Tokyo governor Yoichi Masuzoe suggesting the capital should focus on preparation for the Olympics rather than casino resorts.
Prime Minister Abe Shinzo has called the gambling industry a highlight of his 'Abenomics' growth strategy, as he aims to double tourism by 2020.
The Prime Minister and his Liberal Democratic party hope to pass the casino legislation in the autumn parliamentary session.
Following the news, casino-related stocks Konami Corp and Fuji Media Holdings Inc jumped 1.9% and 5.3% respectively.
Brokerage CLSA estimates the Japanese market could generate revenue of at least $40bn annually, more than six times that of the Las Vegas Strip.