The possibility of sports betting being provided in the first phase of Japanese IRs is very low. But is the reason for its exclusion in the IR guidelines contradictory?
Superbowl LIII took place in Atlanta, Georgia on 3 February in the United States, where the New England Patriots booked their sixth championship win.
The score was 13-3 and the end result a decisive win for the -2.5 favored Patriots, but in the third quarter the LA Rams tied the score, which remained 3-3 until partway through the fourth quarter. With a score like that, those who had money riding on the straight win must have been beside themselves.
Of course, we are only talking about those who have the means to make such bets – at the many sports books in major Las Vegas IRs or with a UK bookmaker. This type of official sports betting isn’t currently allowed in Japan.
However, these days a number of Japanese media outlets show UK bookmaker odds when making predictions for the outcome of sporting contests, such as Japan’s matches during last year’s World Cup or Naomi Osaka’s charge to victory at the Australian Open.
There are also many sports newspapers that offer local odds analyses of horses from Japan participating in international races. And the Japanese public loves it.
Sports betting seems to be almost ingrained in Japanese society, but it still has a long way to go to catch up with Europe and the US.
When the government IR Promotion Committee’s summary was announced in July 2017, the list of permissible casino acts (type and method) clearly stated, “The operator shall manage implementation of casino acts, which shall be limited to acts for which fairness can be ensured. For example, gambling on competitions implemented by other parties such as sports betting, or simple betting between customers shall not be allowed.”
As of today there have been no amendments to this wording and if there aren’t any going forward, the possibility of sports betting being provided in the first phase of Japanese IRs is extremely low.
However, the reality is that sports betting is already happening in Japan under the moniker “toto” for the results of soccer matches. This certainly falls into the category of “betting on competitions executed by other parties” and is extremely popular not only for J-League matches but also saw wide sales during the 2018 World Cup.
Furthermore, during Japan’s off-season, the “Overseas toto” allows customers to bet on Germany’s Bundesliga and England’s Premier League as well. Does that mean even matches held outside of Japan are considered as matches “for which fairness can be ensured”?
If that’s the case, then why has all sports betting been removed from the types of gambling that will be allowed in Japanese casinos?
First of all, toto is interpreted not as gambling, but as a “prediction lot” sold based on the “Law pertaining to implementation of sports promotion voting (lottery)”. The revenue is used for sports promotion, so it is characterized differently than the 30% GGR that casino operators will pay as tax to the national treasury.
The other and perhaps most important point is that the payout rate for toto in its current state is low at only around 50%. It couldn’t possibly stand up to a potential sports book in Japan that would have a 90% payout.
From the perspective of the desire to contribute to our nation’s sports promotion while also enjoying the pastime of sports betting, the ideal plan would be for toto to compromise by increasing the payout as well as the sports offered, so that someday it can coexist with a sportsbook system.