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Members-only sports betting sites under scrutiny
2005-01-06, Daily Yomiuri
Web sites on which members purchase points to bet on sports events with the goal of winning luxury goods are a growing and possibly illegal phenomenon.
But an Osaka operator of one such site denied that such services are illegal, saying the games were for members only.
However, the Justice Ministry and the Fair Trade Commission pointed out that the Web sites could possibly be considered gambling as they were not simple public prize competitions.
The Osaka prefectural police have begun collecting information on the Web sites, suspecting the services are a new type of online gambling.
The police have found two Web sites hosted by an Internet firm in Osaka and a communications service firm in Nagoya. The firms have memberships of about 5,000 and 20,000, respectively.
Members purchase points at a fixed rate--for example, 20 yen per point--through a bank transfer after registration.
Under the system, members bet on the outcome and point spread of professional baseball games. If they win, they earn points and receive goods in exchange for the points they have accumulated. They also can bet on combat sports such as martial arts.
Dividends are sometimes worth several thousands times the original bets. The Web operators offer such luxury goods as cars, liquid-crystal display televisions and stereos.
The Penal Code prohibits gambling and lotteries with the exception of horse racing, pachinko and takarakuji lotteries.
The president of the Osaka Internet firm said its Web site did not arouse a passion for gambling among its users as it set an upper limit on bets. The president also said the company did not require users to pay a commission, adding that it worked with various shops and it was a new form of distribution in which people get goods in exchange for accumulated points.
An official of the ministry's Public Safety Division said it was hard to consider the activities on the Web sites as games since money is exchanged for points, and expensive goods are offered, adding that the sites might be illegal.
An official of the commission's premiums and representations inspection division said such a service was not a public prize competition because it was limited to members only.
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