Inside Asian Gaming

INSIDE ASIAN GAMING MAR 2019 52 JAPAN Horse racing remains extremely popular in Japan “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.