How Japan’s Entertainment Business Act Amendment Is Affecting Men’s Esthetic Salons, Host Clubs, and Cabaret Clubs
The Failure of the Amended Entertainment Business Act [Part 2]
Earning money through overseas prostitution and men’s beauty salons
More than a year has passed since the amended Entertainment Business Act took effect in June last year. The revisions were intended to crack down on abusive business practices by host clubs and regulate scout kickbacks paid by sex-related businesses, which serve as a source of funding for tokuryu—anonymous, loosely organized criminal groups. Have the amendments had the desired effect?
This is the second part of an article by sex-industry journalist Akira Ikoma, who interviewed people working in the industry to assess the impact of the changes.
“Since the amendment to the Entertainment Business Act, there has been a definite increase in women being referred for overseas prostitution and illegal amateur videos. The entire industry is becoming increasingly underground.” — An executive at a consulting firm serving the sex industry
The 2025 amendment to the Entertainment Business Act banned scout kickbacks paid by sex-related businesses. However, kickbacks for referring women to overseas prostitution, amateur video productions, men’s esthetic salons, and regional sex establishments where women work away from home have reportedly remained unchanged—or even increased.
“Overseas prostitution can be lucrative, but penetrative sex is generally expected, and women have to serve more clients per day than they would in Japan. Since they are in a foreign country, the risks to their safety and security are also greater. Recently, there have been more cases of women being denied entry because immigration authorities suspect they intend to engage in prostitution, meaning their travel expenses can go to waste.” — The same source
Since the legal amendment, women seeking to engage in overseas prostitution or work in the sex industry have increasingly gravitated toward tokuryu scouts, who continue to refer women to sex establishments despite the changes in the law.
Meanwhile, scouts who stopped referring women to sex-related businesses have begun introducing them to men’s esthetic salons. Because these establishments are not officially classified as sex businesses, they fall outside the regulations governing scout kickbacks.
“Men’s esthetic salons are repeatedly raided by the authorities, but the overall number of establishments has not declined. These days, many people regard ‘men’s esthetic salons’ as synonymous with the sex industry. Services have also become more extreme, attracting more customers and expanding demand to the point where supply can barely keep up.
ll you need to get started is a pool of women, and advertising costs are lower than those for conventional sex businesses, so the initial investment is relatively small. Some scouts even open their own establishments.” — An executive at a major sex-industry group
Many people believe that these establishments are “surprisingly unlikely to be raided,” making it relatively easy for newcomers with no prior experience to enter the business.
The amendment to the Entertainment Business Act significantly increased penalties for men’s esthetic salons found to be in violation of the law. At one point, rumors circulated that “men’s esthetic salons might be wiped out entirely.” Yet when the new rules took effect, these businesses turned out to be an important alternative source of employment for women seeking to earn money in the sex industry.
Although romantic enticement and outstanding accounts receivable have been banned
Has the exploitation of female customers by host clubs—the problem that prompted the legal amendment—actually improved? We spoke with a well-known host working at a major host club.
“Some smaller establishments still engage in abusive business practices, such as recruiting women through scouts and allowing customers to run up tabs on credit, but these practices have been completely banned at major groups. However, women still take jobs in the sex industry to pay their host club bills.
The only real change is that more female customers are joining sex establishments directly, without going through scouts. More women were already entering the industry this way, but their numbers have increased further. Even before the Entertainment Business Act was amended, it wasn’t particularly common for hosts to introduce women to scouts. The only ones who ran into trouble were the small number of hosts who had been receiving referral fees from scouts.”
He also says the ban on romantic manipulation in sales tactics has brought no particular disadvantages.
“Host clubs are shifting toward a model in which customers find someone they want to support through social media and spend money on them as a form of ‘voluntary support.’ In that sense, banning romantic sales tactics—in which hosts pretend to have romantic feelings to persuade women to spend money—doesn’t make much difference. There have always been hosts who don’t use those tactics.” — Well-known host
In fact, the ban on allowing customers to run up tabs on credit has given host clubs a cleaner image, reportedly attracting more female customers who work daytime jobs, such as office workers.
Here, too, the impact of the legal amendment appears to have been limited.
The Hostess Club Industry as a Source of Funding for Tokuryu
“It’s unthinkable that cabaret clubs would cut ties with scouts. Around 70% of the women working at these clubs were recruited through scouts. I believe most clubs still maintain these relationships. Scout groups linked to tokuryu are particularly active in Roppongi and Kabukicho.” — Manager of a well-known cabaret club in Tokyo
The 2025 amendment to the Entertainment Business Act banned scout kickbacks paid by sex-related businesses, but cabaret clubs are not covered by the restrictions. As a result, the cabaret club industry has reportedly become a “lucrative hunting ground” for tokuryu criminal groups.
Around 70% of the revenue earned by Natural, a scout group identified as being linked to tokuryu, is said to come from scout kickbacks paid by social-dining establishments, including cabaret clubs. Even if the Entertainment Business Act is amended to crack down on sex-related businesses, it will be difficult to dismantle tokuryu groups unless scout kickbacks paid by social-dining establishments are also eliminated.
“In the cabaret club industry, scout kickbacks are typically set at 10% of a woman’s monthly sales. The rate is lower than in the sex industry, where it is around 15%, but the cabaret club industry is much larger, and many establishments make these payments.” — The same source
“If we stop working with tokuryu groups, we’ll struggle to recruit women. It is said that tokuryu has a monopoly on recruitment at a certain well-known establishment in Tokyo. If we want to clean up the industry, we have no choice but to crack down on tokuryu while simultaneously developing ways to recruit women without going through scouts affiliated with these groups.” — Another cabaret club owner
Cabaret clubs benefit considerably from using scouts. Scouts introduce women who are considered highly desirable, clearly boosting a club’s sales. They also look after the women they recruit, which reportedly encourages them to work harder.
“The legal amendment banned romantic sales tactics, but nothing has changed in cabaret clubs. Neither the cast members nor the customers have changed. Even after the amendment, the number of customers coming to entertainment districts has not declined.” — The previously quoted Tokyo cabaret club manager
The amendment to the Entertainment Business Act appears to have done little more than strengthen the ties between the cabaret club industry and scouts.
The police say, “It’s proving effective.”
“The sex industry had already been moving toward greater legitimacy, but the legal amendment has reversed that progress. Women who worked in the sex industry to pay off tabs at host clubs were a minority to begin with.” — The previously quoted executive at a consulting firm
The amendment to the Entertainment Business Act was introduced to address abuses by certain host clubs and crack down on tokuryu criminal groups. Yet rather than improving the situation, it appears to have increased the flow of money to illegal organizations, producing a result that runs counter to the law’s original purpose.
How does the government view the situation? Yasushi Adachi, a member of the House of Councillors who was involved in the passage of the AV New Law, offered the following explanation.
“The police say that the amended Entertainment Business Act is having an effect. They say they have curbed scout kickbacks and managed to stop a considerable amount of money from changing hands. Their view is that, because the overall volume of scout kickbacks across the sex industry has declined, they are also managing to contain tokuryugroups.”
However, many people in the sex industry have voiced the opinion that “the total amount of illegal scout kickbacks has not decreased.” As noted earlier, one contributing factor is the increase in referrals of women to illegal men’s esthetic salons.
If the situation remains unchanged, tokuryu groups are expected to expand their activities not only in the sex industry but also in the social-dining sector, including cabaret clubs. If this dangerous situation continues, both industries are likely to be pushed further underground.
Now, more than a year after the amended Entertainment Business Act took effect, industry insiders are voicing the same complaint:
“They should never have meddled in the first place. If anything, the amendment has made things worse.”
Fundamental measures to achieve the stated goal of cleaning up the industry are urgently needed.
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Reporting, Text, and Photography： Akira Ikoma