Japan Govt. reportedly in talks to legalize betting on football, baseball

Japan's government has reportedly begun internal talks regarding sports betting rules on football and baseball events, according to the Financial Times, which reported that potential regulations could create a market worth about $65 million.

Pachinko is the most popular form of betting currency in Japan, a vertical pinball game that 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, with many Japanese players using foreign-issued credit cards to bet illegally via offshore websites on sports and on online casinos, according to the prestigious newspaper.

That illegal 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.

According to FT's sources, the 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. Opposition to deregulation has been ‘significantly lowered by COVID-19,’ the sources said.

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.

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. 

“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,” mobile games developer Mir told FT. 

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. “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," CyberAgent told FT.

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.