SBC News Japan begins discussions on creation of $65bn sports betting market

Japan begins discussions on creation of $65bn sports betting market

The government of Japan has reportedly begun internal discussions with regards to regulating sports betting on football and baseball events, according to the Financial Times.

Should betting regulations on the two popular sports be liberalised, it would create a market totalling around $65 million according to FT sources with ‘direct knowledge of the situation’.

The most popular form of betting currency practiced in Japan is pachinko, a vertical pinball game, which generates revenue of around $200 billion a year, but its annual turnover is allegedly falling.

In comparison, demand for sports betting is ‘potentially huge’ in Japan, according to the paper, with many Japanese players using foreign-issued credit cards to bet illegally via offshore websites on sports and on online casinos.

This illicit market is reportedly valued at around $40 billion a year, whilst combined betting revenue on horseracing, cycling, and motorboat and motorcycle racing – the only sports on which wagering is permitted – amounted to around $55 billion in 2019.

“For years, both Japan and the outside world have been looking at the possibilities around deregulation of baseball and football betting as the Holy Grail,” one FT source commented.

“It’s probably too soon to say when it will actually happen, but what has happened to sport in the last year has moved the government a long way forward.”

The source further detailed that government discussions could result in deregulation of the Nippon Professional League baseball tournament by 2024, with a restructuring of betting laws on top-flight J-League football – already partially legalised via a pool betting system – potentially taking place in the same year.

Japanese basketball has also attracted the attention of international betting operators, demonstrated by the recent data collection and distribution agreement struck between Genius Sports and Japan’s B.League.

In 2018, Japan’s Diet approved for land-based gambling laws to be extracted from Japan’s Penal Code in order to be legislative reclassified under the supervision of Japan Tourism Committee.   

Additionally, further deregulation could serve as a continuation of the liberalisation of the Japanese gaming market in 2019, which saw plans for the development of gambling resorts across the country given the go ahead by Prime Minister Shinzo Abe, with a venue in Osaka potentially set to open in 2024.

Economic impacts as a result of the COVID-19 pandemic have apparently been a major motivating factor behind the government’s internal discussions regarding sports betting.

Japan’s professional sports industry lost around $2.5 billion in the first six months of 2020 alone due to a lack of paying spectators and cancellation of games, according to Kansai University.

Meanwhile, the upcoming Tokyo Olympic Games have become the most expensive edition of the tournament to date, having accumulated debts of up to $1.9 billion

Although betting on football and baseball, the two most popular sports in Japan, has been considered a ‘longstanding taboo’ and remains ‘politically sensitive,’ the FT’s sources informed the outlet that opposition to deregulation had been ‘significantly lowered by COVID-19.’

In an email to FT, mobile games developer Mir said: “If regulations on betting in other sports are relaxed, new sources of revenue for the growth of Japan’s sport industry can be strongly expected, and we would like to contribute to this area.”

Lobbying by baseball and football representatives, as well as corporations such as CyberAgent and Rakuten, have also played a role in persuading the government to entertain the deregulation of sports betting. 

In a separate email to FT, CyberAgent stated: “If the ban on sports betting is fully lifted in the future, we believe it will lead to new sources of revenue for athletes, their organisations and the sports industry.”

SBC News Japan begins discussions on creation of $65bn sports betting market

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