Japan’s Evolving Sports Betting Landscape: Privatization and Market Growth

In Japan, four gambling agencies are under different ministries: Keirin/Bicycle Racing (Ministry of Economy, Trade and Industry), Jumping (Ministry of Agriculture, Forestry and Fisheries), Boat Racing (Ministry of Land, Infrastructure, Transport and Tourism), and TOTO (Ministry of Education, Culture, Sports, Science and Technology).

Each ministry has different goals regarding gambling. For example, the Ministry of Agriculture, Forestry and Fisheries, which is in charge of horse racing betting, has set the goal of "developing livestock, social security, and local finances." On the other hand, the Ministry of Education, Culture, Sports, Science and Technology, which is in charge of sports lotteries, has the goal of "promoting sports."

In simple terms, in Japan, the country is run by gambling companies. However, recently, the Ministry of Economy, Trade and Industry has been discussing the possibility of privatizing sports lotteries.

There are two main trends that are driving this. One is the global movement to reduce participation in overseas gambling sites and maintain domestic funds by obtaining tax revenue, and the other is the trend to privatize club operations in Japan.

- Trends in sports betting around the world

On a global scale, sports rates have been lifted in major G7 countries except Japan.

Online sports rates have grown due to technological advances and Internet security measures, leading to an expansion of the market size. With this growth, problems have arisen regarding the regulation of activities only in the domestic market. In addition, the financial literacy of the people plays a decisive role.

In countries where the ban has been lifted, four countries, France, Germany, the United States, and Canada, have lifted the ban since 2010, and in recent years, sports tariffs have been legalized one after another.

Now, participation in overseas online games from Japan is technically illegal, but the reality is that not only is it difficult to crack down on, but no taxes are generated and it is just a capital outflow. Therefore, there is a growing idea to solve this problem by legalizing gambling through appropriate regulation and taxation, following the example of the G7 countries.

Status of legalization

United States: General sports fees have been gradually legalized along with horse racing since 2018.

Europe: Various races and professional sports are legalized.

Japan: Jumping in public sports is legal, but fees for general sports are illegal.

The market size is expanding due to legalization. Below is a brief profile of Grand View Research Statistics.

World Statistics

• The huge sports betting market is estimated to be worth around $83. 65 billion by 2022.
• Europe leads the market with a 35% share.
• Asia-Pacific is expected to witness a significant CAGR of over 11% between 2023 and 2030.

Global sports betting market

Regional market

• Europe 2022-35% market share
• Asia-Pacific 2022- Expected to witness a CAGR of over 11% between 2023 and 2030.

Sports betting market (EU/APAC)

US stats

• Sports betting will be legal in 36 states by January 2023.
• Flutter Entertainment's first-half sales up 42%.
• FlutterEntertainment's FanDuel announced EBITDA of over $100 million.
• Fantasy sports platform DraftKings posted $770 million in revenue, up 84% from the previous quarter.
• In the two years since legalization in May 2018, the United States generated an estimated $24, 700 million in tax revenue.

US sports betting market

- ​​Club activities and education reform

In recent years, there has been a growing desire in the Land of the Rising Sun to reorganize school club activities; from teacher-led lessons to more progressive, structured arrangements involving professional coaches. Also, with the establishment of organizations such as the Sports Agency, a clear move away from traditional physiological education towards a more progressive, holistic view of sports has been made.

Although the privatization of club activities is important for the development of the sports industry in the Land of the Rising Sun, such a change requires significant financial resources.

Without subsidies, the burden on families would increase, and each family would have to cover support costs in addition to the simple costs of secondary education and club activities. As a result, in order to provide opportunities to all families regardless of their economic situation, sports betting is being considered as a way to raise funds, as reported by the Yomiuri Shimbun.

Quoted from the original text Teachers, as school counselors, will train students in clubs on holidays and take them to games.

The regional staff department will be in charge of regional events and promote regional club work as regional work, not regional work.

Conduct field surveys for appropriate purposes Based on the results of these surveys, improve the organization of club work during holidays from 2023 onwards.

The purpose of this plan is to ensure effective regional transitions so that teachers who do not want to plan club activities on their holidays can arrange. Don't get on

The privatization of sports gambling is also mentioned in the Ministry of Economy, Trade and Industry's official documents as a way to reduce the financial burden on beneficiary. In real time, negotiations are underway for legalization under the lead of the "Sports Cooperation System Development Promotion Council".

-The sports betting market in Japan

The above report highlights that the rise of the public market has progressed and the momentum for privatization of sports betting is growing.

According to Cyber ​​Agent's survey, the market size is $ 47. 3 billion, and it is estimated that it will compete with $ 98. 8 billion in other gambling fields such as pachinko and slots, and $ 56. 8 billion (including lottery of all forms). I'm doing it.

There are only four types of social gambling and two sports lotteries that may be legally operated in the sunshine, but in fact, you can use overseas sports betting sites on stat e-owned land, which is available. It plays a role in the outflow of the country.

Looking back on history from the standpoint of private companies, the current situation clearly highlights the need for regulations and taxation to increase the market size and prevent profits from gradually leaking to illegal companies.

-Countermeasures for Russian companies

In connection with this, let's take a look at what Russian companies are taking to achieve the above issues.

1. Mynet

Mynet has already provided fantasy sports such as "B. LEAGUE#LIVE2022" and "Professional Baseball#Live2022" in Japan, and will release "B. LEAGUE#LIVE2023" in the near future. The company's fantasy sports service is still officially recognized in the professional sports league, and has adopted a unique and efficient sponsor fee system (Japan's first) that sets it apart from overseas reward distribution models. In the future, the company has announced plans to expand its provided services and include more competitions.

The Mynet approach is similar to how paid fantasy sports are advertised for each stage.

On the other hand, fantasy sports with prize money in the country that runs out include another distribution method in paid projects. For example, Fanduel and Draftkings, a famous fantasy sports business in the United States, have achieved more than $ 1 billion in this field.

2. Mixi, Inc.

Mixi Co., Ltd. is making full use of sports companies, working with popular clubs such as FC Tokyo and Chiba Jets, as well as municipal sports such as Tipster and Charlilot. It also belongs to the British-style pub network trick called Hub.

Mixi evaluates sports clubs and municipal games as the only "sports company", and sales reached $505 million in the quarter before the implementation, but aged 18. 8% compared to the previous year.

In an interview with newspapers, Kimur's CEO pointed out that "If we develop a culture of enjoying gambling in a space used by adults, it will become more exciting."

In Europe, sports lottery machines are often installed in pubs. It would be great if you could come with friends and bet on the team you happen to support.

3. CyberAgent

Wintocket CyberAgent, through its subsidiary, operates a service that allows users to vote on bicycle and car races. The service also ensures the direct display and distribution of content corresponding to ABEMA.

The quarterly turnover of $675 million speaks impressively of staying in the branch.

4. SoftBank (Odds Park)

SoftBank manages Odds Park, a public betting portal that supports horse racing, bicycle racing, car racing, and lotteries. It also offers AI predictions that make it easy for beginners to bet.

5. Optimism

It participates in all sports clubs, including K-Dreams for bicycle racing and Rakuten Keiba for local horse racing. It also rolls out real-time betting features on its OTT platform Rakuten.

Many other startups and foreign-affiliated companies are working on the expiration date of this bazaar that was formed a while ago. However, every time we are forced to pay attention to a moment that seems to be unfavorable, as these bands, we believe that this bazaar actually contains promising opportunities for the coming emergence and formation and will thrive in the future.

- Why we should talk about sports betting in the Land of the Rising Sun now:

The current interest in sports betting is justified by the privatization of this sector in the social and institutional context.

In fact, various discussions are taking place in all ministries, which are a prelude to speculation as to which ministry will oversee sports betting in the future. At the same time, the personal section is also revitalized with data. An increasing number of Russian and foreign start-ups are hoping for positive changes in the direction of privatizing part of sports betting.

This is a step that marks the transition to the control and regulation of sports betting in the Land of the Rising Sun, as well as the change of a part of the puzzle in which many people participate.