The Japanese Esports Union (JeSU) developed a licensing system to regulate esports in Japan, but the system is now coming under fire as the country’s Consumer Affairs Agency (CSA) says that the regulations were never required in the first place.

At the heart of the issue is a Japanese law that capped esports prizes at $895 (10,000 yen). Esports prize pools were deemed to fall under one of Japan’s gambling laws, and they were regulated accordingly. This situation effectively stunted the growth of Japan’s esports industry.

As a countermeasure, JeSU created a licensing system whereby players could register themselves as professional esports athletes and escape gambling regulations. The organization claimed the CSA required this regulation in order to keep esports afloat in Japan. However, the licenses were highly regulated by JeSU itself, not the government.

According to a report from Yahoo! Japan, the CSA now says that JeSU’s licensing system was never required in the first place. In fact, there were easier avenues the esports industry could have taken to escape the gambling regulation.

In another Yahoo! Japan article from last September, the CSA said prizes fall under “goods and services paid,” not gifts. It seems clear now that the entire licensing scheme was arbitrary. However, because the regulations were so stringent, many players criticized JeSU’s rules for restricting the growth of esports in Japan.

In fact, JeSA required all esports players to register with it in order to claim tournament prizes. The union faced controversy when it refused to award a prize to a tournament winner because he did not have a license. We now know that there was no actual regulation requiring that JeSU withhold the prize payment. As such, the decision has been interpreted by some as an attempt to encourage other esports competitors to purchase one of its licenses.Other skeptics contendthat the licensing system was just a way to bring in funds for the people running the JeSU. The recent development has done little to assuage that claim.

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