Japan's J-League lottery fails to hold its punters

Japan's Resona Bank is demanding a government-affiliated operator of the national football lottery pay 14.4 billion yen in overdue commissions by mid-May, The Asahi Shimbun reported. The bank is considering a lawsuit if the National Agency for the Advancement of Sports and Health, an independent administrative agency under jurisdiction of the education ministry, fails to present a viable repayment plan.

The Toto lottery, which debuted in 2001, allows punters to bet on the professional J-League. Subsidies to foster athletes and improve sports facilities are meant to be alloted from proceeds.

Lottery management entered into a five contract with Resona Bank to sell tickets, manage funds and pay prize money. Under the contract, which expired last month, the bank is due a certain percentage of sales as commissions. Until 2002, Resona received commissions in accordance with the contract. In 2003 and 2004, however, the lottery operator paid only half of the commissions due to a slump in sales. In 2001, annual sales were 64.2 billion yen, well below the initial estimate of 200 billion yen. Sales are estimated at 14 billion yen for the year ended March.

The lottery operator has proposed payments in installments for what it owes Resona. But the bank said it cannot accept further rescheduling unless the agency presents an acceptable repayment plan. To reduce costs and increase sales, the agency has stopped using Resona and has begun managing ticket sales and other operations directly.

The Ministry of Education, Culture, Sports, Science and Technology said it has no plan to use public funds to make the commission payments. "Lottery costs should be covered with lottery sales," a ministry official told Kyodo newsagency.

The Yomiuri Shimbun earlier reported that the accumulated deficit of the lottery scheme had surged from 15.4 billion yen at the end of fiscal 2004 to about 22.4 billion yen at the end of fiscal 2005. Sales have continued to be sluggish since a new season of the J-League started in March, and it was feared the sales will not reach the target again in fiscal 2006.

The ministry reportedly plans to revise its ordinance limiting the number of betting opportunities in the lottery to 50 times a year, aiming to increase the maximum number by 10 or so. The agency introduced new versions of the lottery in addition to the initial version betting on all results of 13 games.

In March, two punters each won 200 million yen at Toto, the biggest ever payout in the lottery's history. The winners, who correctly selected the results of the weekend's 13 J-League games, earned the huge payout courtesy of a jackpot that accumulated when there were no winners in previous events.