Online betting continues to expand globally alongside advances in digital technology. At the same time, concerns over addiction risks and illegal site usage have strengthened regulatory tightening trends in many countries.
Europe is advancing advertising restrictions and rigorous age verification, while the United States is developing varying regulatory models by state. Japan is no exception, facing new challenges that existing legal frameworks cannot fully address. Striking a balance between regulation and market growth is a critical theme that will significantly influence the industry’s future development.
Current Legal Framework in Japan
Japan has long had state-managed gambling services, such as publicly operated horse racing, bicycle racing, and auto racing, as well as lotteries. These operate under clear legal frameworks, with revenues reinvested into public works and regional development.
Meanwhile, most online bookmakers operating in Japan are overseas businesses without a domestic base. Under current laws, their activities are neither explicitly illegal nor legal. This creates a persistent “grey zone” where users can easily access these services from within Japan, yet the operators remain outside Japanese regulatory oversight. This ambiguity is the primary driver behind discussions for stricter regulation.
Directions for Regulatory Strengthening
The government and administrative bodies are particularly focusing on three areas. First is addiction prevention. To curb excessive use by minors and young adults, discussions are underway to introduce identity verification and usage limit systems.
Second is blocking illegal sites. Access control by internet service providers is being considered against unauthorized streaming and fraudulent betting sites.
Third is advertising regulation. Excessive promotions and misleading displays are seen as hindering healthy market formation, and restrictions on these are likely to tighten. Overseas, systems like time restrictions on advertising and mandatory risk disclosures are already in place, and Japan is expected to move in a similar direction.
Market Impact Forecast
If regulations are strengthened, a short-term decline in user access will likely be unavoidable. However, in the medium to long term, there is potential for a shift towards transparent, legal services.
Operators will also likely accelerate technology adoption to ensure reliability. Examples include digital IDs for identity verification and dashboard features that visualize usage history.
Furthermore, introducing responsible betting frameworks incorporating addiction prevention measures could restore trust across the entire industry. While the market may temporarily shrink, a new growth model premised on healthy development is likely to be explored.
Balancing Health and Growth
The online betting market constantly navigates a tension between regulation and growth. Excessive regulation stifles the market, while lax oversight risks escalating addiction and illegal use. What’s needed is a regulatory framework that ensures transparency and safety while enabling the provision of attractive services to users.
Whether Japan can achieve both soundness and growth in the future hinges on how the government, operators, and users interact. Regulation is not meant to halt the market; it can be an opportunity to create a new order.
