In the Far East region, the Japanese sports betting industry has always been in deep waters. Perhaps due to the lack of a strong sports business atmosphere in Japan, there is a lack of more commercial interests to drive it. In the public lottery sector, Japanese government departments monopolize the issuance of some speed competition-type lotteries such as horse racing, bicycle racing, boat racing, and motorcycle racing, with the prize pool return rate usually being 70%-80%.
Regulations Prohibiting Gambling and the Breakthrough of Cryptocurrency
Chapter 23 of the Japanese Penal Code prohibits most forms of gambling. The Ministry of Economy, Trade and Industry discussed this issue in 2022, but it ended without conclusion.
Japan has a relatively conservative business atmosphere, lacking the driving force of commercial interests. In plain terms, without funds to lobby the government, the bureaucratic system is unlikely to have the subjective will to promote the development of Japan's sports betting market.
The development of cryptocurrency gambling has broken this pattern, allowing Japanese users to bypass traditional payment methods and place bets on offshore websites. This is, in fact, a way to circumvent Japanese law, bypassing Japan's traditional payment networks and making gambling activities appear more free.
Although it seems that Japanese IP activity on cryptocurrency gambling sites is active, in the entire potential lottery consumer group in Japan, only a very small part is influenced by cryptocurrencies. TGM pointed out in its 2022 report on Japanese sports betting that only 9% of people bet on sports betting in the past 12 months.
The two websites with the highest gambling traffic in Japan—Netkeiba and JPA.go.jp, the former being Japan's largest horse racing information site, and the latter the official website of Japanese horse racing lottery. They are the choice of over 95% of Japanese competitive gambling enthusiasts, offering convenience, compliance, and safety as the Japanese entertainment consumption view.
The traffic using Japanese IP to access Stakes, Gamdom, and Rollbit is more likely to be foreigners staying in Japan, who prefer English. The reason is that these sites have terrible language services, which even Chinese people can't stand, and the Japanese, who pay more attention to details, are even less likely to use them. In contrast, I believe Yuugado and Casitabi are more likely to have some native Japanese users, as they indeed provide services in Japanese. Customers of Bet365 and Pinnacle, which offer relatively normal Japanese services, are more of a mix between the two.
Localization Services
As of 2023, Japan has a population of 121 million, with a median monthly salary of 471,000 yen ($3000). The quality of the potential entertainment consumer group is a considerable number, which begs the question, why do so few people explore this market?
The answer may lie in the relatively high customer acquisition costs. First, Japan prohibits most forms of gambling (Pachinko is an exception), and offshore transactions pose legal risks to end-users. In a generally conservative atmosphere, user subjective willingness is discounted, increasing the cost of customer acquisition.
Japan is a culturally highly self-conscious country, culturally inclined to introversion and output. Providing accurate Japanese services on websites is just the basic measure to attract Japanese users. Localization services basically require setting up a Japanese server, creating a website that aligns with Japanese players' values, which is costly. Even so, a small part of the marketing team is working on localization services for Japan's sports betting market.
Yuugado (遊雅堂)
Default Japanese mode, the parent company is Toronto's listed company Intertain Group Ltd. Yuugado's brand was born in 2021, entered the gambling industry in 2022, mainly allowing Japanese users to deposit and withdraw money in Japanese yen. The website adopts a Japanese UI design, emphasizing simplicity, softness, and cleanliness, mainly operating casino games (including Pachinko) and sports betting for the Japanese market.
Casitabi (カジ旅)
Founded by Nordic gamers in 2015, it was the first RPG (personalized character) gaming site, the parent company is Sweetspot NV, registered in "Curaçao Island", operating casino games (including Pachinko) and sports betting for the Japanese market.
A fully Japanese website, allowing Japanese users to use cryptocurrencies for deposits and withdrawals. Sports betting products include soccer, baseball, basketball, and mixed martial arts (UFC).
Shinqueen (クイーンカジノ)
Known as Japan's number one online casino, the parent company is Lowkey Ltd., a partner of Mönchengladbach, mainly operating casino games (including Pachinko) and sports betting games for the Japanese market. A fully Japanese website, offering various deposit and withdrawal services including bank transfers, e-wallets, and cryptocurrencies.
Konitbet (コニベット)
Konitbet started offering online casino and sports betting services to the Japanese market in 2019. An RPG (personalized character) game image and user-friendly page design align with Japanese players' preferences. Japanese services, offering various deposit and withdrawal services including bank transfers, e-wallets, and cryptocurrencies.
Japan's Gambling Essence: Pachinko Games
South Africa's media "Mail Guardian" mentioned that Konitbet attracts players from three aspects: easy to understand and operate, more substantial promotional bonuses to encourage active betting, and valuing personalized player experiences.
These teams focused on the Japanese gambling market seem very patient, not too flashy in product marketing, valuing the game's personal experience. They provide Japanese users with various safer cryptocurrency modes, and if they had operated in Japan five or six years earlier, there might have been more cases of financial freedom among Japanese players.
Future Business Application Scenarios in the Japanese Sports Betting Market
Koshien's Bracketization
The historically permanent Koshien summer baseball tournament is the most likely to become a global commercial IP event in Japan. If left to Americans, it could be turned into a 'high school version' of March Madness in minutes. Years ago, the author suggested that Koshien could emulate March Madness and introduce a Bracket game.
Japanese high schools and trading companies could join forces with Japan's top sports IP, Shohei Ohtani, to create a Koshien event with greater commercial impact. Imagine MLB's Shohei Ohtani flying back to award the Koshien champion, what an encouragement it would be for the young players!
Second Dimension Gambling
In the United States, professional sports leagues, in order to attract younger audiences, have adopted live broadcasts with animated images of real players to attract the Alpha generation (audiences after 2012).
Animated images of real matches for the Japanese market should be a good penetration project, as virtual images can satisfy the Japanese otaku's imagination of beautiful things.
Removing the Prize Cap on Competitive Games
Global esports products are one thing, Japan's are another. "Japan's Gifts and Representation Law" imposes strict prize caps on competitive games, such as esports, hindering the industry's development. Removing the prize restrictions might one day see Japanese-style gaming machine esports events appear in the betting market.
"Porn Actress" Themed Event Operations
We live in an era of traffic economy, combining the erotic economy with competitive sports might be a very eye-catching thing. There can be a King's League in the world, and of course, there can also be a 'Porn Actress' League. Betting on a Porn Actress League is very characteristic of Japan.
Discussing the future of Japan's sports betting industry is interesting; they have their own unique product lines and personalized products. A typical sports culture export market, but without an open entertainment mindset to actively complete commercialization. If choosing to operate an offshore Japanese sports betting market, building a safe and personalized player experience under a Japanese server framework is important.
