In early February, news broke there would be an addendum to an age-old law in Japan aimed at illegal gambling that restricted paid esports tournaments from being hosted in the country.This adjudication marked a colossal significance for Japanese esports; players can now experience financial freedom and, Japan itself can join in on the booming esports market that they’d previously been largely excluded from. With the dust settling following its announcement, we’re taking an extensive look into how the shift in ruling will shape Japanese esports going forward in this week’s ESI Gambling Report.HistoryYota Kachi, aka Pekos. Photographer: Kentaro Takahashi/BloombergJapan and video games have been synonymous since the digital pastime’s inception; engineering and fostered famed titles such as Space Invaders, Pac-Man, Tekken and Street Fighter into cultural staples. Japan found an early sweeping success in Arcade gaming in the 1980s, embracing games like Donkey Kong and Super Mario as symbols of their time which influenced video games for future generations. The excitement surrounding the video game culture in Japan ushered them not only into revolutionary software, but also hardware leaps such as the Nintendo Entertainment System (NES) and 3D graphics; this distinguished Tokyo as a leader for decades. The first ever glimpse of esports can be traced back to Japan. Once, as an integral part of mainstream culture, video game tournaments were televised to millions before falling fate to oppressive legislation.Pitiless legislation curbs esports in JapanWith Japan’s heavy influence of the video game industry, and even having begun broadcasting esports well ahead of the curve, you may be asking yourself: what happened? An outbreak of illegal gambling prompted laws to curb online gambling, this was primarily aimed at video poker tournaments used in organized crime to generate income. A wide net of rather bizarre rules cast by the Japanese government has seen professional gaming as collateral damage, this limits tournament winnings hosted in the country to just 100,000 yen (£684).SankoThis consistent harsh ruling halted esports in its tracks, thus hindering Japan’s greatest professional gaming talent by removing the platform for those to make livable wages. Japan was virtually nonexistent on major tournament calendars as well; a deficiency in prize pools hampered organisers from hosting events in the country, further dividing them from the rest of the sphere. In lacking this support, the Japanese esports ecosystem has a financial deficit that is detrimental in its ability to thrive. However, one organisation is taking significant strides in changing the status quo.License to killJapan’s first sign of relief came in the form of an announcement that three of the country’s biggest esports organisations would merge to create the Japanese Esports Union (JESU). The powerhouse team is aiming their sights towards cultivating the local professional gaming space by combining resources to promote esports in Japan. JESU released a statement earlier in February outlining the prerequisites for those with professional gaming talent who might be eligible to receive a license to compete, bypassing the strict regulation. A translation of the statement read, in summation one must possess: “self-awareness of being a professional, must demonstrate sportsmanship when playing, be dedicated to outstanding results in JESU-officially recognized titles, and contribute to the development of domestic esports.” While JESU’s spotty definition of a professional gamer is creating some confusion amongst players, licensing may not furnish an uncut solution to the problem.Currently, the list of titles eligible for license are: Street Fighter V, Tekken 7, Winning Eleven 2018, Call of Duty: WWII, Puzzle & Dragons, and Monster Strike. A two year life on licenses, coupled with JESU’s vague classification of an esports professional still appears as another hurdle in the way of Japan’s professional gaming ambition. Despite not being a ceasefire to the uncompromising legislation, JESU’s deal provides an avenue for pro-gamers to establish a foundation for the localised community.East of Tokyo, Tokaigi 2018 was set to be the first tournament under the reframing, issuing the first ever pro-gaming licenses to the top finishers. With these invaluable licenses on the line attendees had the opportunity to “witness the moment a professional gamer is born” fashioning a historic atmosphere at the Makuhari Messe convention center.Japan’s esports prospectUnderstanding that JESU’s model is designed to separate professional players from casual competitors, there’s a distinguishable framework to how the licenses can actually succeed. Adopting pro-gamers can enable those to dedicate more hours to their respective games, catering to Japan’s existing video game market and leading as a segway into its esports derivative. While the somewhat convoluted story of Japanese esports will continue to unfold more clearly over the next 12 to 24 months, there is some speculation to how Japan’s entry into the esports galaxy will shape the rest of the faction.Credit: PexelsAlbeit, and difficult to predict reliably, I’m confident that the influx of professional Japanese contenders will enlist a swell of new followers into esports, increasing its global popularity. It wouldn’t be surprising to see Japan’s deep-rooted gaming heritage jump start an infrastructure to facilitate amateurs into professional grade players (mirroring the system we see in Korean StarCraft), deepening the global esports talent pool. Japanese esports leagues can be an upshot of pro-licenses trickling down, generating an additional betting sub-market to supplement the current prospering esports betting industry.This past January, Japan landed an exalting break in what is projected to be a landmark year for its esports division by hosting EVO 2018: the biggest fighting game tournament series in the world. Large scale tournaments like this are going to be critical in bringing Japan back into the esports circle while culminating betting outside of the country, they’ve single-handedly placed eyes on the developing landscape. There’s no covenant esports betting will spore in Japan anytime soon – especially with the region’s current gambling restraints – but the market has a better opportunity than ever before to spill over into the nation’s infrastructure.