Brtdku

Battle Royale (2000) opens with the completion of a previous Battle Royale event, where the winner is shown to be a girl. The amount of media coverage shown in this scene is fairly extensive, showing a number of reporters, photographers and cameramen trying to cover the winner being brought out by the military. Within the context of the movie, it is then reasonable to assume that the Battle Royale event is popular (or at least well known), because of the media coverage it receives.

Later on in the movie, Kitano asks the students of class 3-B if they're aware of the BR act. All of the students look clueless at this, and he proceeds to explain what the BR act is and about the Battle Royale tournament they will be participating in. Out-of-universe, I understand that this is exposition, which is required to bring the audience up to speed on what is happening.

But within the context of the movie, why is not even a single student of class 3-B aware of the BR act?

Who says they weren't?

They just got drugged and woke up who knows where, their teacher is nowhere to be seen and they face a resentful guy from years ago. One's got to be a little lost.

Sure, no one answers Kitano in the first place, but once again they're waking up and taking the situation in - who wants to be "that guy" at a time like this?

Later on, from the script:

                       KITANO

                Listen up! Because of folks like

                Kuninobu here, this country is

                absolutely no good anymore! So the

                bigwigs got together and passed

                this law. Battle Royale!



      We hear a sinister music chord.



                          KITANO

                So, today's lesson is ... you kill

                each other off until there's only

                one left. Nothing's against the

                rules!



      Boy #2, Keita Iijima, laughs. He is the class clown.



                          KITANO

                What's funny?



      Girl #5, Izumi Kanai, is puzzled. She is in the same gang

      as Sasagawa, its only female member.



                          KANAI

                Teacher, I don't understand what

                you are saying. This can't possibly

                ...



                          KITANO

                Actually, your teacher, Hayashida,

                deeply opposed the selection of

                Class B.

Kitano doesn't leave her the chance to finish, but my guess is that they knew it was a thing, just that it couldn't possibly be them who got selected. There are a lot of students in Japan, what are the odds your class gets picked? These things only happen to someone else.

But as a great piece of literature reminds us, we are all somebody's "someone else".

This is confirmed by the book, where the students are aware of the "Program", and one 3B student explicitly states he can't believe his class was picked.

"All right, all right, please be quiet." Sakamochi clapped his hands together
several times to get their attention. The clamor suddenly subsided.
"Let me explain the situation. The reason why you're all here today
then..."

Then he said: ".. .is to kill each other."

Now no one responded. Everyone remained frozen, like figures in a
still photograph. But —Shuya noticed — Shogo continued chewing his
gum. His expression hadn't changed. But Shuya thought he'd caught a
glimpse of a faint grin flash across his face.

Sakamochi continued smiling and resumed, "Your class has been selected
for this year's 'Program.' " Someone shrieked. [...]

Every junior high school student in the Republic of Greater East Asia
knew what the Program was. It was even covered in school textbooks
from the fourth grade on. Here we will quote from the more detailed
Republic of Greater East Asia Compact Encyclopedia: [...]

And later in the same chapter:

Some of his classmates might have been hoping that Kyoichi would provide some adequate rational form of protest. Kill the friends you were hanging out with yesterday? It was impossible. Someone's making a mistake here. Hey rep, can you take care of this one for us?

But Kyoichi completely let them down.

"M-my father is a director of environmental affairs in the
prefectural government. How could the class I'm in be selected for th-
the Program?..."