CULTURAL BACKGROUND
To understand what a regulated market in Japan could look like is intrinsically tied to the culture of sports in Japan and how fans engage with their favourite sports and teams. Japan, like any other country on this planet, loves sports. Its people play, participate, watch and even bet on it. Among all the choices they have, baseball is the most popular. Almost 88% of the male population played baseball when they were growing up, so they know the game inside out. Although the same number of women didn’t grow up playing the sport, their knowledge of the game is still considerable.
It’s not only baseball, either, given the growing popularity of football within the country, with the Japanese national team continuing to perform well at flagship events such as the FIFA World Cup. Football has become huge in Japan, while the female ratio of those interested in football exceeds that of those interested in baseball. American football, basketball, tennis and rugby are other significant sports that people follow.
However, the popularity of these imported sports is notwithstanding Japan’s national, iconic staples of sport. Sumo is a national sport, so no one ever gets to live in Japan without hearing about sumo wrestling. The people of Japan grow up watching these games with their friends, parents and grandparents. In Japan, it’s also worth noting that a governing body controls every sporting organisation. Because of this, sports at the amateur level are popular, too, such as high-school baseball. High-school baseball tournaments are some of the most significant events in Japan.
They run in both spring and summer, and teams from every corner of the nation come together to compete for the ‘flag of the champion.’ These tournaments attract scouts from major professional, corporate and college teams, who hone in on these high-school events in search of the next big thing. So, naturally, the media covers this and it becomes an important event on the sports calendar for fans. Just like college football in the US, the National High School Baseball Tournament, in particular, is covered nationwide.
“Because of this, sports at the amateur level are popular, too, such as high-school baseball. High-school baseball tournaments are some of the most significant events in Japan”
REGULATIONS
Despite the popularity of these flagship sports in Japan, sports betting is not currently regulated for the likes of baseball or football. In fact, the only regulated sports are horseracing, track cycling, motor racing (bike) and single-engine boat racing. While this may seem strange, given the popularity of other sports, a bureaucratic monopoly keeps sports betting regulated for just these sports currently. Odds on these sports are widely available, and any introduction of sports betting on other, more popular sports, has yet to be agreed upon by Japanese lawmakers.
WIDER MOVEMENT
So what does the current set of sports betting regulations in the Japanese market look like on a wider scope, and will wider regulations on other sports ever be put in place? The Ministry of Economy, Trade and Industry (METI), and the Japan Sports Agency have been rolling out study groups for several years on how to extend their monopoly to popular sports.
The METI and Japan Sports Agency published a joint 98-page study at the end of 2022, which suggests that the days of sports betting on a wider scale are coming. But, first, Japan needs to regulate the governing body of each sporting sector to cooperate, share and stay in lane together; in terms of regulatory conditions, to create the right infrastructure.
Studies have been undertaken as to how the US, UK and EU are systematically controlling the economic environment of sports betting, which shows that a quarter of the markets are dedicated to NFTs and Sports Tokens.
So blockchain and crypto are a growing factor. Data streaming technology by proprietors is another topical issue that is coming to the fore. Many new technologies have been introduced to fill the void of data streaming technology and, most probably, someone will find the solutions to bridge the streaming gap through technology; but none of it will work unless you have stories that people will want to follow.
"The potential for the Japanese market is enormous, but it will not open without access to local knowledge and the willingness of operators to adapt"
CULTuRAL DIFFERENCES
Understanding the ways in which people enjoy sports in Japan will be crucial in determining the success of operators that may one day move into the market. Like every territory in the world, if you are trying to access its resources, you need to understand its cultural differences; particularly regarding big, established markets. The challenge in Japan does not lie in defining the most popular sports but in how you can deliver for fans in terms of narrative. The potential for the Japanese market is enormous, but it will not open without access to local knowledge and the willingness of operators to adapt. Creating a sportsbook that matches the kind of drama Japanese people love will be the biggest challenge for operators.
MARKETING NARRATIVES
Sports betting will always be the front-runner in a market like Japan. As the vast selection of sports entertainment becomes available, more chances and options to create new narratives will become apparent. Japanese people, in general, love narratives. Users need to feel they are participating contextually in the story of the sport they are betting on. This is a key focus for any operator that may, one day, be looking to enter the Japanese market.
