Religion
The basis of belief in the Laughing Buddha is mainly legend. As it goes, if a person is to rub his belly, it brings forth wealth, good luck, and prosperity. He is often admired for his happiness, plenitude, and supposedly wisdom of contentment.
Chinese Buddhists have adopted Hotei as the Laughing Buddha into the Mahayana Buddhist pantheon and his image may be found in the first hall of many Buddhist monasteries. Ch'an temples will usually have Hotei located at their entrances & courtyards. Eventually, he became the object of popular worship as a god of good luck and prosperity. Later enthusiasts attributed divinity to the figure and gave the already appointed title of Maitreya Buddha to him.
In Japan, Hotei is also seen as a one of the Shichi Fukujin, the Seven Japanese Shinto-gods of Luck. He is supposedly the only member of the seven based on an actual person. Back when Buddhist missionary monks were delivering the message & way of Gautama Buddha onto the islands of Japan, they devised a method to more efficiently reach the local Shinto inhabitants. By manifesting Buddhist principles, with Shinto Kami, the monks were successful. Kami are seen as Shinto gods and were worshiped as such. The Buddhist monastics were able to better communicate their ideology to Japanese natives by using the Kami's as examples in common Buddhist practice. Thus, Buddhism became very widely accepted in Japan and from one of these manifestations, came Hotei.
Western Invasion
Recently, Hotei statues, statuettes and amulets have become relatively well known in Western lands. From the new enthusiasism has grown much ignorance due to misunderstandings of culture & factual history. A common misconception is the false acquaintance between the Laughing Buddha and Gautama Buddha, the founder of Buddhism and at times the random enthusiast cannot tell the difference between the two. Hotei is also referred to as the patron saint of restaurateurs, fortunetellers and bartenders. When one over eats and over drinks, jokingly friends attribute it to Hotei's influence.