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Will Japan Ever Legalize Online Sports Betting?

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On January 7, 2023, New York State, the third most populous state in the United States, saw its first anniversary since the legalization of online sports betting. Approximately $16.6 billion were spent on state-licensed bookmakers, and those bookmakers brought in a total income of $900 million to the state government. Although the legal status of such gambling in the United States depends on each state, many more states are moving towards legalization. 

And countries such as the UK, Germany, France, Italy, as well as Canada, also allow online sports betting as a whole nation or partially, it is only Japan, among the member states of the Group of Seven that prohibits gambling in general. Will Japan Ever Legalize Online Sports Betting? If yes, when?

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Massive Market Potential

The Japanese sports market is bigger than it looks, not to mention that the population of the country is over 100 million people. The WBC where the “Samurai Japan” won the championship against the US, is still fresh in our minds. The event was hugely enjoyed in the Japanese market as baseball, whether it is a professional league or high school tournament, has traditionally been one of the most popular sports in Japan. Soccer is another popular sport and its professional league, J-League, generates more than 120 billion JPY as of 2021. 

Additionally, the 2019 Rugby World Cup held in Japan brought a huge sensation to Japanese society. But other sports draw as much attention, such as tennis, figure skating, and table tennis, all of which Japanese players are expected to play an active role. 

This may make the Japanese market look somewhat different from how other markets look in Europe or the US. People nowadays in the market enjoy almost all sports as long as there is a major international or domestic event like the Olympics or the world championship, or that sort. 

What’s Holding from Legalization?

Current Japanese law prohibits gambling, with the exceptions of a few publicly run gambling such as horse racing and bicycle racing. Especially with how big of a presence horse racing is in Japanese society, it is clear that sports betting will have its place once introduced to society. 

Gambling is illegal in Japan according to the Penal Code of Japan made in the early 20th century during the Meiji era. Naturally, there is a big gap between the society and technology envisioned by this law and the current one in the 21st century. For example, what is prohibited by this law is to offer an opportunity for gambling in Japan, as well as to engage in gambling provided by such entities that are based in Japan. 

Currently, there are a lot of bookmakers that are accessible from Japan, all of which are offshore, which means that Japanese punters are betting on international bookmakers operated from outside the country. 

However, with such big popularity for sports and market potential, why is there so little social debate about legalization in Japan?

One of the main reasons can be how sports are seen in the country. In Japan, sports have a certain kind of sanctity and a strong sense of cleanliness. There has been match-fixing over illegal betting which became a big problem in the past, especially within the national sports of sumo and baseball. Top athletes are expected to become exemplary roles as well. Scandals in their private life such as adultery can ruin their careers as athletes in Japan. With such demands from the society that athletes should single-mindedly work hard to deliver the best performance, the market might still face resistance to linking the sports market with gambling, and thus sports betting may not yet be at the stage where it is widely accepted socially.

Land-based Casinos To Appear In Late 2020’s

However, it is not that there is no opportunity to accelerate the legalization of sports bookmakers in Japan. One opportunity is a land-based casino to be built under the Integrated Resort Bill passed in 2016. Currently, in the process of selecting its location, Japan’s first legal casino is expected to open in the late 2020s.

If this project succeeds and good enough economic and social impacts are seen, there is a possibility that sports betting will be legalized at once. There are also rumors that the government is lobbying for legalization. So after all, it may be legalized sooner than it is anticipated.

When that happens, there is a good chance that it greatly exceeds the existing public gambling, such as horse racing. Especially considering that horse racing has an old-fashioned image of going to a racetrack and buying a ticket, whereas online betting from smartphones is a lot more common nowadays, which allows bookmakers to gain attraction from younger demographics. In that case, there is also the possibility that it will become a major industry that will become a new source of tax revenue for the government.

The hurdles to achieving this are not to be underestimated, but there is a possibility that the social tide could change significantly, so keep your eyes on it.