Like in the West, the movement to legalize sports betting is also quietly gaining momentum in Japan. Notably, companies that stream sports events online are eagerly looking for opportunities.
However, the discourse in Japan still predominantly holds a cautious stance towards the legalization of sports betting. Is Japan finally on the brink of entering an era where fans can bet on games via smartphones?
DAZN Company Incorporates Betting into Its Business Vision
Last December, a seminar themed around the digital transformation of sports was held at the Tokyo National Stadium, attended by over three hundred participants.
The seminar was organized by a group called the "Sports Ecosystem Promotion Agreement." This group aims to revitalize the sports industry by fully utilizing sports-related information and imagery through digital means, ensuring a healthy financial circulation within the sports sector. Founded last year by thirty private companies and knowledgeable individuals, the group now includes one hundred participating companies.
In a panel discussion titled "Trends in Digital Transformation of Sports in the West and the Current Situation in Japan," sports betting was a hot topic. DAZN's Japanese subsidiary, a giant in online streaming, has significantly impacted the Japanese sports broadcasting industry. The company's Executive Vice President, Manabu Yamada, born in the UK, was one of the speakers. He discussed his company's operations and future development plans.
"DAZN Group has established DAZN BET, starting to offer betting services in the UK, Italy, and Spain."
Currently, aside from public sports betting like horse racing and bicycle racing, and sports lotteries focused on soccer and basketball, sports gambling is prohibited in Japan, including betting through overseas websites.
However, DAZN is exploring the development of a system that would allow its Japanese users to bet online while watching games, should sports betting become legal in the future. Yamada explained, "With just a press of the betting button, DAZN members can directly access the betting service, making it cost-effective to acquire betting customers."
According to DAZN Group's annual report last year, the company has been providing sports streaming services in 225 countries and regions worldwide since 2016. The company has continuously acquired broadcasting rights for various sports events, becoming one of the global giants in the field and venturing into the betting industry last year.
In Japan, DAZN has signed a massive broadcasting contract with the Japan Football J-League for the years 2017-2028, worth a total of 223.9 billion yen. It also broadcasts all matches of the Football World Cup Asian qualifiers, as well as football leagues in Italy, Spain, and other countries. Except for the Hiroshima team, it broadcasts home games of the other eleven teams in the Japanese Professional Baseball League and has expanded its reach to women's tennis, basketball, boxing, and racing events.
Starting this year, DAZN has adjusted its subscription prices, with the monthly fee increasing from last year's 3000 yen to 3700 yen, previously at 1925 yen per month. Despite the criticism on social media due to the consecutive price hikes, this is due to the company's continuous investment in acquiring broadcasting rights to expand its business scale.
If sports gambling is legalized, many of DAZN's sports events could potentially become betting subjects. Not just DAZN, but other IT companies might also join the competition to explore the sports business market.
What are the Chances of Legalizing Sports Gambling?
Whether to introduce a sports betting system depends on the legalization of sports gambling. In this regard, the movements of the members of the parliament are noteworthy. The secretary-general of the Liberal Democratic Party's Sports Nation Investigation Committee (Chairman: Toshiaki Endo), Representative Hideki Miyauchi, spoke very cautiously in his address at the seminar.
"The Tokyo Olympics have ended, and it's impossible to allocate much budget to sports policies anymore. Under these circumstances, we revised the toto law and started issuing a new type of sports lottery called WINNER, which allows betting on individual games. The main consideration is to encourage people to buy toto tickets, thereby enjoying sports more. If this is not implemented, it's hard to accept other forms of gambling."
The Sports Business Subcommittee set up by this investigation committee had suggested, "It would be beneficial to deepen understanding of the cultural and social backgrounds related to sports betting and explore the possibilities of utilizing sports betting."
The "Regional × Sports Club Industry Study Group" created by the Ministry of Economy, Trade, and Industry has also repeatedly brought up the issue of sports betting. In its first recommendation report, it proposed, "Whether it's possible to discuss the future of our country's elite sports based on the development and expansion of the sports betting market."
However, if private companies are allowed to operate sports betting, it would be difficult to ensure the protection of public sports betting and toto sports lotteries. Currently, the sports business atmosphere is not strong, and the legalization of sports gambling remains undecided.
After the Tokyo Olympics, the Japanese public's view of the Japanese sports industry has become increasingly strict. In the Olympic sponsorship corruption scandal, key figures responsible for sports business development, including former executives of Dentsu, were arrested, along with sponsors. Moreover, suspected bid-rigging issues arose during the Olympic test events, leading to searches of several advertising giants including Hakuhodo, ADK Holdings, and Tokyu Agency, besides Dentsu. Currently, companies are not very active in sponsoring sports, and the sports business is almost at a standstill.
Using Artificial Intelligence to Prevent Cheating
Concerns about unfair practices such as match-fixing are technically feasible to address with machine monitoring, a concept that has found a market among relevant parties. The mechanism involves using artificial intelligence (AI) to monitor betting odds and other dynamics to detect any unfair practices. It is said that the United States has already established a corresponding system.
In today's era, it's possible to track every move of the players during a game in detail. During this year's Football World Cup, VAR (Video Assistant Referee) technology became a hot topic. By setting up multiple high-performance cameras on the field, it's possible to accurately capture the players' movements and the ball's trajectory. The pass by Japanese national team midfielder Kaoru Mitoma along the baseline, which was validated by VAR, assisted in scoring a crucial goal for Japan, demonstrating that video precision is superior to the human eye. If sports gambling is introduced, such technologies are likely to be employed.
However, many doubts remain unresolved. Transactions manipulating the outcomes of matches usually occur behind the scenes. This is not a problem that can be solved by machines alone. To prevent cheating, players and referees are monitored by AI and video during matches, and people spend money betting on these events. Is this really the true nature of sports?
Baseball Giants Team Holds a Negative Stance on Introducing Betting
At the seminar, the general affairs and business department head of the Giants Club of the Japanese Professional Baseball League, Harumi Hoshi, also spoke. Addressing the immense pressure that betting could bring to players, he clearly stated:
"Professional baseball should not involve betting. Gambling can lead to match manipulation or gambling addiction. Baseball is a noble sport, and gambling that tarnishes this nobility cannot be understood by Japanese society. As demonstrated by the Football World Cup, the true value of sports lies in its absence of lies and deceit."
It's conceivable that once sports betting is legalized, sports organizations and leagues could obtain data usage fees or licensing fees from private companies running betting businesses. However, it seems that the Giants team is not planning to join this trend.
Of course, the Giants' view may not represent the entire professional baseball community. In the Sports Ecosystem Promotion Agreement, which advocates for the introduction of betting, companies holding baseball clubs such as Rakuten, SoftBank, and DeNA are listed as board members. They are likely exploring possibilities to expand their businesses.
The sports world may face financially challenging times ahead. Currently, no special opinions have been expressed by sports industry figures regarding the introduction of betting, but it is indeed a topic that needs serious discussion. If bound by immediate financial interests, it's possible to stray off course. We must prioritize the cultural development of sports and plan for its future accordingly.
