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Japanese policymakers are rumored to be holding internal talks about expanding the country’s regulated sports betting offerings to include the popular baseball and soccer leagues — a move that, if made, could result in a sports wagering market worth an estimated $65 billion.
Unidentified sources tell the Financial Times wagering on the Nippon Professional League — one of the world’s most competitive baseball associations after Major League Baseball (MLB) — could happen as soon as 2024, with broader betting on J-League soccer occurring in the same year.
Betting on the J-League is currently permitted under a lottery-style system known as “Toto.” But that’s far different than traditional single-game wagering.
The advantage to the Toto system is that people who want to play don’t really have to know anything about the sport,” according to Japan Visitor. “The sports dailies usually offer their picks, although randomly picking the winners seems to be just as effective as researching who is going to win.”
Japan also has an eight-team professional basketball association — the Japan Basketball League — and golf is popular with the local population. But it’s not immediately clear if those sports are part of the plans being discussed by lawmakers.
Japan Sports Betting Landscape Is Attractive
Today, sports betting isn’t off-limits in the Land of the Rising Sun, but it’s confined to cycling, horse racing and motorboat and motorcycle racing.
Aside from horse racing, those sports aren’t popular with American bettors. But as is the case in the US, online betting is taking off in Japan. In 2019, those wagering on those four sports combined for $55 billion in revenue, according to the FT.
And, like the US, particularly before the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA), experts and industry observers argue Japanese gamblers are already sending billions of dollars a year to offshore sportsbooks. The bulk of those wagers are directed to the Nippon Professional League and J-League games.
Home to the world’s third-largest economy, strong disposable income, tech-savvy citizens, and already enthusiastic gamblers, Japan makes for a desirable market for sportsbook operators.
Speaking of Operators…
Some analysts are speculating about which operators stand to the benefit the most if Japan expands regulated sports betting, with MGM Resorts International (NYSEARCA:MGM) and Entain Plc (OTC:GMVHY) coming to mind.
The reasoning behind that thesis is simple. The Bellagio partner and local partner Orix are the only group competing for an integrated resort license in Osaka, and are widely viewed as likely winners of one of Japan’s first three casino permits.
Should MGM gain that approval, it would likely pursue bringing the booming BetMGM brand, on which Entain is its 50/50 partner, to Japan if sports betting expands there.
“If MGM were to win the casino license and sports betting were to be legalized, we believe Entain could work with MGM to develop this market,” according to UK research firm Peel Hunt.
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