Lol. Only in Japan. Craziness like this is just one reason I love he country.
I'd you go to game centers in Japan there are often horse racing games. Usually they are simple betting games where you get the horse's stats and try to pick the winner--so basically, exactly like real horse racing but with fake horses. The games are actually quite popular. Often there is a tiny fake track with little plastic horses that run around to show you the "race".
This, however, looks much more entertaining!
(Also, absolutely not the weirdest thin in the world by Japanese standards).