Forecasting Revenue in The Betting Industry Using Location Analytics

Forecasting Revenue in The Betting Industry Using Location Analytics

In an age of online and mobile betting, there’s nonetheless a place for the physical betting shop. The Association of British Bookmakers (ABB) reports that around 9,000 betting shops still exist in the UK, making up around four percent of all retail units in the country.

But with more shops closing than opening, it’s increasingly clear that picking the right location is vital to a store’s success, particularly when you consider the ABB’s estimate that opening a shop costs between £150,000 and £250,000. This is where location analytics is a valuable tool for forecasting revenue and which places are most likely to be the most viable.

In a submission to a government review, the ABB argued that contrary to stereotypical thinking, store location isn’t usually aimed to capture potential customers of low income and other deprivation. Instead the key factor seems to be population density, because gambling is a high volume/low margin business. Successful locations are therefore busy retail areas rather than residential neighbourhoods, possibly because customers combine a trip to a betting shop with other shopping activities.

Location analytics can make it easier to establish prime locations by putting together data and visualisation based on the above-mentioned factors plus the availability and market rates for leasing or buying premises. The beauty of such an approach is that you can quickly assess the combined effect of multiple factors by looking at the various “hotspots” and “not-spots” on a map in a way that’s awkward and time-consuming with data tables.

Using data such as population density and the number of other retail establishments in the vicinity can give a good comparative insight that can be used in forecasting revenue. To turn this into an absolute figure can be difficult, but if you have access to revenue figures from branches in a bookmaker chain, it may be easier to see how your proposed site compares and what revenues similar sites are already generating.

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