Japanese lawmakers began to flesh out a plan to legalize casinos, with an outline of proposed legislation allowing gambling resorts to be developed not only in big cities but also in regional areas.

The document includes a proposal that inspectors be appointed to monitor casinos for illegal activities, according to a copy obtained by Bloomberg News from a person who attended a panel meeting where the proposal was presented.

While betting on horse, boat and bicycle races is allowed in Asia’s second-largest economy, casinos are currently banned and a lawmakers’ group is planning to submit a separate bill to parliament as soon as this year to legalize them. Tokyo’s selection to host the 2020 Olympics boosts confidence the government will open up the market and international companies including Wynn Resorts Ltd. has plans to build resorts in the country.

“There are great hopes as regards casinos from the point of view of building up tourism,” Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo today. “At the same time the whole government must consider whether this is possible from the standpoint of crime prevention and maintaining order.”

Casino operators and the makers and sellers of casino equipment should all be required to obtain permits to operate, according to the document presented to the meeting attended by a cross-party group of pro-casino lawmakers. Japan should limit the number of casinos initially before it considers gradually increasing the number, according to the document. It didn’t say where casinos should be built.

The proposals will form the basis of legislation to be submitted to parliament after the bill legalizing casinos.

Wynn Resorts and MGM Resorts International executives have said their companies would invest several billion dollars in the North Asian nation. Las Vegas Sands Corp. and Caesars Entertainment Corp. are also seeking expansion opportunities in what is projected to be the world’s second-biggest gaming market.

Tokyo and Osaka are potential sites that Wynn, MGM and Las Vegas Sands have said they are interested in developing. The companies either plan to or are open minded about having local partners to develop projects.

Among the potential local partners are trading companies such as Mitsui & Co., Mitsubishi Corp. and Itochu Corp., and gaming machine makers Sega Sammy Holdings Inc. and Konami Corp. Sega Sammy shares climbed as much as 3.9 percent to 2,727 yen in Tokyo before trading at 2,638 yen at 1:41 p.m. local time. Konami rose as much as 1.2 percent before trading 0.1 percent higher at 2,332 yen.

Japan has long been touted as an attractive gaming market with a large and relatively rich population base. It also enjoys global appeal as a tourist destination. The country would generate $10 billion in casino revenue a year should it open up the market, Union Gaming Group LLC estimated.