So what is Kyotei? How is it helping the
country?

In short, it is a revenue engine, centered on
Japan's motorboat racing industry. Bettors
provide the funds, which are then used to
conduct philanthropic activities all around the
country and the world.

Background
In the wake of World War II, Japan was in the worst situation a
country can face. Firebombs and atomic weapons had decimated her
cities and population. She found herself occupied by the forces of
a foreign country. She was being forced to renounce overseas assets
of roughly USD 2.8 billion and to pay reparations of more than USD
2.6 billion. Her shipbuilding facilities were utterly destroyed. To
an island nation with the fifth longest shoreline in the world,
this was one of the most serious blows she could have taken.

In 1945, Japan had been brought as low as a country can be.
However, by the 1950s, she was ranked first in the world in
shipbuilding, and by 1979, Ezra Vogel was able to stir
international debate with a book entitled, "Japan as Number One."
There are many reasons for this phenomenal success, but the most
important one would have to be active intervention by the country's
own government.

It conducted support programs in many fields, not the least of
which was Japan's devastated shipbuilding industry. One thing that
the government did to aid various sectors was to legalize four
forms of gambling, each with its profits directly tied to a
different sector. In this way, four key areas were helped:
horseracing aided agricultural development; motorcycle racing
supported the automotive industry; bicycle racing built up the
finance sector; and motorboats played a major role in revitalizing
the shipbuilding and maritime industries.


For centuries, gambling throughout Asia has been seen as more of a
pastime than a social ill. While it of course has the potential for
abuse in unregulated venues, with the proper planning and
transparency, it can become a real boon to an economy. With the
proper regulations, its funds can target social ills with a
tightness of focus that is impossible for government-run taxation
systems.

In Japan's case, these gambling concerns played a very large role
in revitalizing the national economy in the run-up to the
phenomenal economic growth of the 60s, 70s, and 80s.

Of the four, Kyotei is the furthest removed from government
direction. For this reason, the funds generated by system can be
targeted at extremely specific municipal and social needs, rather
than fed into a broader system of national maintenance.