That sequel has actually turned out to be a prequel, Fireball Begins, tracing the beginnings of the bloodsport to Thailand's not-so-distant past.
Here's the synopsis:
During the Vietnam War, American soldiers stationed in Thailand learnt Muay Thai fighting. The soldiers began to challenge the local gyms and with the advantages of their size, they defeated them one after another. News of the defeats reached a village that had inherited one of the oldest styles of Muay Thai who defeated the foreigners. The soldiers challenged the villagers to a new game that combined basketball to guarantee them the competitive edge. Thai fighters had to learn the art of basketball to win the challenge of the first Fireball game and restore Thai honor.
(Via The Film Catalogue)