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

Murasaki BV
7 min readSep 22, 2023

In Japan, four public gambling services fall under different ministries: bicycle and auto racing (Ministry of Economy, Trade and Industry), horse racing (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’s objectives for public gambling vary. For example, the Ministry of Agriculture, Forestry and Fisheries, in charge of horse racing, aims to ‘promote livestock farming, social welfare services, and local public finances’. Meanwhile, the Ministry of Education and Science, responsible for the sports lottery, seeks to ‘promote sports’.

Simply put, gambling in Japan is run by the state. However, recent discussions are exploring the privatization of sports betting, led by the Ministry of Economy, Trade and Industry.

Two underlying trends drive this. First is the global movement to retain funds within the country by reducing participation in overseas gambling sites and generating tax revenue, and the second is the trend towards privatization of club activities in Japan.

– Trends in Global Sports Betting:

Globally, sports betting bans have been lifted in major G7 countries, except Japan.

Online sports betting is expanding due to technological advancements and online security measures, leading to increased market size. Regulatory challenges in domestic-only operations have emerged alongside this growth. Additionally, financial literacy plays a crucial role.

In fact, in countries where the ban has been lifted, four outliers — France, Germany, the USA and Canada — have had their bans lifted since 2010, and sports betting has been legalized one after another in recent years.

Now, participating in overseas online gambling from Japan is technically illegal, however, the reality is that it’s not only challenging to control, but also does not generate tax and is just an outflow of funds. Therefore, there’s a growing idea to address this by legalizing it through proper regulations and taxation, similar to G7 countries.

Legalization Status:

USA: Gradual legalization of general sports betting since 2018, alongside horse racing.

Europe: Various races and professional sports are legal.

Japan: Public races are legal, but general sports betting is unlawful.

The market size is growing due to legalization. Here is a brief summary of the statistics from Grand View Research.

Global Statistics:

  • Global sports betting market was valued at approximately $83.65bn in 2022.
  • Europe led the market with a 35% share.
  • The Asia-Pacific region forecasted a remarkable CAGR of over 11% from 2023 to 2030.
Global Sports Betting Market

Regional Markets:

  • Europe 2022–35% market share.
  • Asia-Pacific 2022 — Projected CAGR of over 11% from 2023 to 2030.
Sports Betting Market (EU/APAC)

USA Statistics:

US Sports Betting Market

– Club Activities and Educational Reforms:

In recent years, Japan has witnessed a growing trend towards the reorganization of school club activities from teacher-led coaching, to a more modern and structured approach involving professional coaches. And with the establishment of entities like the Sports Agency, there’s a clear movement away from traditional physical education towards a more modern and holistic view of sports.

That said, while the privatization of club activities is essential for the growth of Japan’s sports industry, this change would require a significant amount of financial resources.

Without subsidies, the burden on families would increase, needing each household to shoulder an added premium on top of the usual contributions of school and club fees. Therefore, in order to provide opportunities for all families regardless of their financial status, sports betting is being considered as a means of funding, as discussed in the Yomiuri Shimbun

Moreover, official documents from the Ministry of Education, Culture, Sports, Science and Technology have highlighted the need to address this transition.

Adapted from the original source.
Teachers as school duty for coaching pupils in club activities on holidays and leading them to competitions.

The regional human resources will be responsible for the regional activities and promote the regional club activities as a regional activity, rather than as a regional activity to be carried out by the

Conduct practical research for the following purposes Based on the results of these studies, from 2023 onwards, the stage of club activities on holidays is to be improved.

The project aims to achieve an effective regional transition and to ensure that teachers who do not wish to supervise club activities on their days off are able to do so. Not to be engaged.

The privatization of sports betting is also mentioned in official METI documents as a means to reduce the financial burden on beneficiaries. Discussions towards its legalization are currently underway, led by the Sports Ecosystem Promotion Council.

– Size of the Japanese Sports Betting Market:

The reports above highlight the increasing growth of the global market, and that the momentum for the privatization of sports betting has increased.

CyberAgent research estimates the potential market size in Japan to be a substantial $47.3bn, potentially rivaling other well-established gambling sectors like pachinko and slots at $98.8bn, and public gambling (including various forms of lotteries) at $56.8bn.

Only four types of public gambling and two types of sports lotteries can operate legally in Japan, however, the reality is that foreign sports betting sites are accessible from within the country, contributing to an estimated outflow of $33.8bn to $40.5bn.

Looking at things from the perspective of a private sector company, the current situation clearly highlights the need for regulation and taxation in order to harness the potential market size and prevent revenue leakage to illegal operators overseas.

– Measures Taken By Domestic Companies:

To that end, we have seen various domestic companies take steps to address the above opportunities.

1. Mynet Inc.

Mynet already offers fantasy sports services like B.LEAGUE#LIVE2022 and Professional Baseball #LIVE2022 domestically, with plans to release B.LEAGUE#LIVE2023 in the near future. Their fantasy sports services are also officially recognized by professional sports leagues and employ a unique and effective sponsorship reward scheme (the first in Japan) that deviates from the overseas fee distribution model. They have also announced plans to expand their offerings to include more competitions in the future.

Mynet’s approach aligns with how participation fee-sharing fantasy sports are marketed abroad.

On the other hand, sponsored prize-funded fantasy sports in Japan follow a different distribution mode commercially. For instance, FanDuel and DraftKings, prominent operators of participation fee-sharing fantasy sports in the US, have achieved turnovers exceeding $1bn in this sector.

2. MIXI, Inc.

Mixi, Inc. takes a comprehensive approach to the sports business, collaborating with prominent clubs like FC Tokyo and the Chiba Jets, as well as publicly operated sports ventures through TIPSTAR and Charli Lotto. They also hold a stake in the British-style pub chain known as HUB.

mixi considers sports clubs and public gambling as a single ‘sports business’, and has yielded sales reaching $50.5m in the most recent quarter, although it has grown by 18.8% in YoY.

In an interview with NewsPicks, President Kimura said, “The more we foster a culture of adults enjoying a bit of gambling in places where they drink, the more interesting it will become.”, he commented.

In Europe, pubs often feature simple betting machines which offer sports lotteries. It would be exciting to be able to come for a drink with friends and casually bet on the team you support.

3. cyber-agent

Through their subsidiary WinTicket, cyber-agent operates a service that allows users to vote in bicycle and auto races. This service also provides live viewing and distribution of related content on ABEMA.

Their $675.5m quarterly transaction volume strongly underscores their industry presence.

4. Softbank (Odds Park)

Softbank operates Odds Park, a portal site for public betting that supports horse racing, bicycle racing, auto racing, and LOTO. They also offer an AI Prediction service, simplifying betting for beginners.

5. Optimism

Optimism participates in various sports clubs, including services like K Dreams for bicycle racing and Rakuten Horse Racing for local horse racing. Their OTT platform in Rakuten also opens avenues for live betting.

Numerous other startups and foreign firms are now actively pursuing entry into this newly-emerged market. And while we must always remain vigilant about potential downsides like addiction, we believe that this market holds promising prospects for future growth and development, and will flourish in the future.

– Why We Should Talk About Sports Betting Now in Japan:

The current spotlight on sports betting is driven by the privatization of this industry within the societal and institutional context.

Various discussions are underway across different government ministries, prompting speculation about which ministries will oversee sports betting in the future. Simultaneously, the private sector is increasingly becoming active, with a growing number of domestic and foreign startups eagerly anticipating a positive shift towards privatization in the sports betting sector.

It’s like changing a piece of the puzzle, and lots of people are involved — a move that signifies the transition in how sports betting is managed and regulated in Japan.

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Murasaki BV

Murasaki BV - A blockchain game & creative media studio that specializes in Japanese games, anime media, NFTs, and manga.