Currently, legal gambling is limited to pachinko, sports race betting, and lotto. Gambling in Japan is a multi-trillion Japanese yen industry comprised of the three aforementioned segments. Pachinko is the largest segment and generates the lion’s share of the industry’s revenue. The penetration of gambling in Japanese society is substantial. For instance, the active player population of pachinko is in the millions, while there are tens of millions of betting participants at horse races throughout the year.
Other than horse racing, motorboat racing is immensely popular and is also the only gambling domain that generates net sales of gambling tickets that surpass one trillion Japanese yen. However, bicycle racing and NAR-administered horse racing sales have picked up significantly in recent years, closing in on the one trillion-yen mark. In general, the total amount wagered at sports race betting events has grown in the past years, especially after the advent of the COVID-19 pandemic.
However, this was not the case for the pachinko industry, which has been contracting for many years and was hit particularly hard by the COVID-19 pandemic. The various advantages brought by digitalization, coupled with the restrictions caused by the COVID-19 pandemic, seem to be game-changers in Japan’s gambling industry. Whether the pachinko industry will slowly dwindle into obscurity, eclipsed by other forms of gambling, or find a way out of its current downward trend remains to be seen. Regardless, the era of digitalization offers new possibilities and poses new challenges to all entities involved.
Sports race betting
Sports race betting in Japan is controlled and administered by organizations affiliated with the government. There are four main sports race betting disciplines: horse racing, motorboat racing, bicycle racing, and motorcycle or auto racing. Horse racing (keiba) is the dominant discipline among betting sports in terms of the revenue generated. Horse racing is administered either by the Japan Racing Association (JRA) or the National Association of Racing (NAR). JRA generates the highest betting turnover among gambling sports disciplines.Other than horse racing, motorboat racing is immensely popular and is also the only gambling domain that generates net sales of gambling tickets that surpass one trillion Japanese yen. However, bicycle racing and NAR-administered horse racing sales have picked up significantly in recent years, closing in on the one trillion-yen mark. In general, the total amount wagered at sports race betting events has grown in the past years, especially after the advent of the COVID-19 pandemic.
Current trends in the gambling industry
An overarching trend observed even before the COVID-19 pandemic was the ongoing decline in the active pachinko player population, and the shrinking attendance at live venues at sports race betting events. The decline in visitors at venues is accompanied by the digitalization of the sports betting industry. Innovations and technology increasingly provide consumers with flexible and exciting user experiences. This strategy seems to have worked well with sports betting, reflected in increased gambling turnover despite a significant overall decline in attendances at venues.However, this was not the case for the pachinko industry, which has been contracting for many years and was hit particularly hard by the COVID-19 pandemic. The various advantages brought by digitalization, coupled with the restrictions caused by the COVID-19 pandemic, seem to be game-changers in Japan’s gambling industry. Whether the pachinko industry will slowly dwindle into obscurity, eclipsed by other forms of gambling, or find a way out of its current downward trend remains to be seen. Regardless, the era of digitalization offers new possibilities and poses new challenges to all entities involved.
