JAPAN Trends and Developments Contributed by: Masayuki Fukuda, Nagashima Ohno & Tsunematsu
Users bet on certain sports on bookmakers’ platforms and such users’ betting may constitute “gambling” since they incur a possibility of gaining or losing property on a matter whose “outcome depends upon chance”. While the outcomes of sports are not deter- mined solely by chance, and players’ skills or other extrinsic factors are also important, the Japanese courts’ precedent states that the above-mentioned requirement that the “result depends upon chance” may be satisfied if chance may even slightly affect the result, except for when the result is obvious judg- ing from the difference of skills or other factors, such as in betting on matches of Japanese chess ( shogi ) or “Go”, in which games are normally categorised as “two-player, zero-sum, logical perfection information games” (where there is little room for chance to affect the outcome). In respect of bookmakers who control the premises, accept bets from users, distribute winners’ prizes, and collect certain commission fees or entry fees, such activities will constitute “running a gambling place for the purpose of gaining profit” prohibited under the Penal Code. Under a Supreme Court precedent, the above requirement of “running a gambling place” may be satisfied even where a person does not necessarily gather customers into a particular physical site. In this regard, in 2015, a lower court (Fukuoka District Court) held that, in a case where a bookmaker accepted bets from users via emails and the defendant assisted the bookmaker by forwarding emails including handicaps and other information to users, it would be difficult to conclude that the bookmaker had secured and pro- vided a certain space or facility as a gambling place. The court denied an argument that an electronic space by which the bookmaker and the customers are connected may constitute a “gambling place” since such construction is far from what is normally understood from the wording of the Penal Code. How- ever, in 2017, another lower court (Osaka High Court) held, in a case where a baseball bookmaker accepted bets via a mobile phone application, that a “gambling place” may include collective places, including a place where bets are received and tallied by a person who also has other information (eg, as to the customer’s location) and it is not necessarily limited to a place where gambling activity physically takes place.
In respect of licensors who hold the rights to official statistical data and provide such data to data pro- viders in exchange for fees (such as sports leagues, sports teams, or athletes) and data providers who receive official statistical data from the licensors and provide such data (with added values such as odds for sports betting) to bookmakers, they may possibly be charged with aiding and abetting users’ “gambling” and/or bookmakers’ “running a gambling place for the purpose of gaining profit” considering the court precedent where providing roosters for cockfight- ing or providing market price information for “market price gambling” was charged with aiding and abetting gambling and/or running a gambling place for the pur- pose of gaining profit. In this regard, whether it will be charged as an accessory to gambling or for running a gambling place will be determined by the relationship among the parties or the roles played by the parties (if licensors or data providers play a major role, they may be charged even as co-principal criminals for “gam- bling” or “running a gambling place for the purpose of gaining profit”). Esports In respect of esports, there has recently been discus- sion over whether or not esports events with prize money (in Japan, prize money for esports events will be paid only by a third-party sponsor on the grounds that if prize money is paid from entry fees paid by players, such competition may constitute “gam- bling”, a criminal offence under the Penal Code) shall be regulated under the Act on Control and Improve- ment of Amusement Business (the “Amusement Busi- ness Act”) as a business allowing customers to use slot machines, video game machines, or other game machines that may be used for originally unintended use stimulating customers’ desire to gain profit by chance in stores and other similar facilities (in short, an amusement arcade business). If an esports event is regulated by the Amusement Business Act, the prize money for such esports event would be limited to JPY9,600 (around USD100). First of all, amusement arcade businesses must be operated in “stores and other similar facilities” and therefore online esports events will not be regulated under the Amusement Business Act. Secondly, the Amusement Business Act only regulates businesses that allow customers to use “slot machines, video game machines, or other game
265 CHAMBERS.COM
Powered by FlippingBook