Covid’s success calls on Japan to rethink the rules on sports games

The Japanese government has initiated internal discussions to legalize the game of football and baseball to an extent that would create a combined sports betting market estimated at more than $ 65 billion a year.

The secret discussions, which were described in the Financial Times by two people with direct knowledge of the situation, mean this bets in Nippon Professional League baseball could be deregulated in 2024.

A more complete deregulation of betting on the top-tier J-League of football, which is already partially legalized through a pool-type lottery system, could come the same year.

The discussions break a long-standing taboo against opening up opportunities for the Japanese public to freely bet on the nation’s two most popular sports.

While political sensitivity around sports betting remains high, people familiar with the talks said resistance to the idea had been significantly reduced by Covid-19 and the economic damage it had caused to professional sport. .

During the first six months of 2020, the Japanese professional sports industry suffered a loss of $ 2.5 billion due to the cancellation of games and the absence of spectators, according to an estimate by Kansai University.

Japan only allows you to bet on four sports: horse racing, cycling and motorcycle and motorcycle racing. In 2019, the combined betting revenue of all four stood at approximately 6 6 trillion ($ 55 billion), with horse racing betting increasing significantly mobile betting applications went online.

The largest form of game in Japan is pachinko. The annual turnover of the vertical pinball game falls, but remains at about $ 200 billion a year. Your business model depends a legal loophole.

People participating in online gaming sites said Japan’s appetite for betting on its national baseball and football leagues was potentially huge. Many Japanese already use credit cards issued by foreigners to illegally gamble on sports and online casinos through places hosted abroad, creating a market that, according to senior industry figures, created a turnover of about $ 40 billion annually.

“For years, both Japan and the outside world have been seeing the possibilities of deregulating baseball and football bets like the Holy Grail,” said one person familiar with the discussions.

“It’s probably too early to say when it will really happen, but what has happened with sport in the last year has pushed the government forward very far.”

Representatives from the baseball and football industries, along with corporations such as Rakuten, CyberAgent and Mixi involved in providing legal online betting, have tried for years to persuade the government that this potential betting revenue should remain in Japan.

In a sign that attitudes had changed significantly during the pandemic, the government last summer asked advertising and market research company Dentsu to investigate the environment around the potentially deregulatory bets on baseball and football. Internal government discussions began after the presentation of Dentsu in September, people familiar with the situation said.

Dentsu said he had not been able to immediately confirm the existence of his presentation.

Aside from the pressures created by the pandemic, pressure groups noted the government’s enthusiastic efforts in 2016 to push for laws that legalize casinos in Japan.

In December, the Japanese New Economy Association, a business lobby group set up by Hiroshi Mikitani, founder of e-commerce group Rakuten, called for the lifting of the sports betting ban. It was part of a series of emergency proposals the group made to the government to revive Japan’s tourism industry.

Two months earlier, the internet group CyberAgent estimated that the Japanese sports betting market could generate up to 7 tonnes of annual revenue if more popular sports were added to current training.

“If the sports betting ban is completely removed in the future, we believe it will lead to new sources of revenue for athletes, their organizations and the sports industry,” said CyberAgent, which already operates an online platform for to betting on horse and motorcycle racing. , said in an emailed statement.

Mobile game developer Mixi also said he had participated in various committees and study groups to discuss the promotion of sports businesses, including sports betting.

“If regulations on betting on other sports are relaxed, new sources of revenue can be strongly expected for the growth of the Japanese sports industry and we would like to contribute to this area,” the company said.