CEBR - The contribution of betting shops to the UK economy

Centre for Economics and Business Research Ltd.

Unit 1, 4 Bath Street, London EC1V 9DX

t: 020 7324 2850 f: 020 7324 2855 w: www.cebr.com

The contribution of betting shops to the UK

economy

A study on the economic impacts of betting shops in the

economies of the UK, England, Wales and the English

regions

Report for the Association of British Bookmakers (ABB)

June 2012

2

© Centre for Economics and Business Research Ltd, 2012

Disclaimer

Whilst every effort has been made to ensure the accuracy of the material in this document,

neither Centre for Economics and Business Research Ltd nor the report’s authors will be

liable for any loss or damages incurred through the use of the report.

Authorship and acknowledgements

This report has been produced by Cebr, an independent economics and business research

consultancy established in 1992. The study was led by Oliver Hogan, Cebr Head of

Mircoeconomics with analytical and research support from Daniel Solomon, Cebr

Economist. The views expressed herein are those of the authors only and are based upon

independent research by them.

This study has been commissioned by the Association of British Bookmakers and has

utilised a combination of data provided by ABB and its members and those available in the

public domain through ONS, Nomis etc.

The report does not necessarily reflect the views of ABB.

London, June 2012

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Contents

Contents ................................................................................................................................................. 3

Executive Summary ............................................................................................................................. 4

Introduction ........................................................................................................................................................................ 4 Macroeconomic impacts of betting shops ...................................................................................................................... 4 Local economic impacts of fewer new betting shops .................................................................................................... 8 High Street vacancies and the economic environment facing the broader retail sector ........................................... 9

1 Introduction and background ................................................................................................. 11

1.1 Betting shops in context .................................................................................................................................. 11 1.2 Purpose of this study ....................................................................................................................................... 12 1.3 Structure of this report .................................................................................................................................... 12

2 Methodology and assumptions ............................................................................................... 14

2.1 Estimation of the economic impacts of betting shops ................................................................................. 14 2.2 Analysing the local economic impacts of changes to the planning regime for betting shops ............... 19 2.3 Predicting high street vacancies in the retail sector .................................................................................... 20

3 The macroeconomic impacts of betting shops ...................................................................... 21

3.1 Contribution of betting shops to GDP .......................................................................................................... 21 3.2 Contribution of betting shops to employment ............................................................................................. 25 3.3 Contribution to the UK Exchequer ................................................................................................................ 29

4 Local economic impacts of changes to the planning regime for betting shops ................ 30

4.1 Chronological overview of the issues ........................................................................................................... 30 4.2 Challenges of a new Use Class for betting shops ........................................................................................ 31 4.3 Economic implications of a new Use Class for betting shops .................................................................... 33

5 High street vacancies and the retail environment ................................................................ 37

5.1 Top-level view: the retail and wholesale sector ........................................................................................... 37 5.2 Looking deeper: food, household goods and clothing & footwear stores ............................................... 39 5.3 Economic implications of denying the use of vacancies by betting shops ............................................... 40

Annex I: Questionnaire underlying in-depth interviews with the major bookmakers ........... 42

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Executive Summary

At the request of the Association of British Bookmakers (ABB), Cebr has investigated the

economic impact of betting shops. The fruit of our lengthy investigation is contained within

the pages of this report, and is summarised in this preamble.

Introduction

There were three broad objectives for the study, namely:

1. To establish the macroeconomic impact of betting shops in each of the UK, England,

Wales and the English Government Office regions;

2. To examine the potential local economic impacts of changes in the planning regulations

governing the opening of betting shops; and

3. To analyse vacant commercial lots on the High Street in the context of potential changes

in the planning rules as applied to betting shops, as well as the tough economic

environment facing the broader retail sector. These are vacancies that could, in theory,

be occupied by betting shops with all their attendant benefits and with zero opportunity

cost in terms of alternative uses.

For the study, we used a combination of national statistics sources, data supplied by ABB

from its annual economic modelling of the industry and Cebr’s in-house economic models.

However, the study also incorporated the results of a primary research element, involving

in-depth interviews with four of the biggest players in the betting shop industry – namely

Gala Coral, Ladbrokes, Paddy Power and William Hill.

The qualitative information gleaned during these in-depth interviews was supplemented by

the quantitative responses of the bookmakers to a questionnaire designed by Cebr. The

combination of these qualitative and quantitative data provided invaluable inputs for

objective 2 of the study – local economic impacts of changes to planning regulations – but

also for the sub-UK macroeconomic impact assessments under objective 1.

Macroeconomic impacts of betting shops

In broad terms, Cebr has discovered, though extensive investigation and economic

modelling of the latest official data that the betting shop industry accounts for

approximately 0.2 per cent of UK GDP. This equates with an absolute GVA contribution

of almost £2 billion in 2009.

To set this in context, Figure 1 illustrates the direct economic contribution of betting shops

relative to the leisure – or, under the SIC system, the Arts, Entertainment & Recreation –

5


sector as a whole, but also relative to the leisure sector’s constituent industries.1 This shows

that betting shops are responsible for about 15 per cent of the contribution made by the

aggregate leisure sector and for about 40 per cent of the contribution made by the gambling

and betting services industry.

Figure 1 also suggests that betting shops are almost as important in economic terms as some

of the other leisure industries. For instance, the GVA contribution of the creative and

performing arts industry is only slightly larger than that of betting shops.

Figure 1: Direct GVA contribution of betting shops relative to the Arts, Entertainment & Recreation sector (SIC 1-digit level) and its constituent industries (SIC 2-digit level), 2009

Source: ONS supply-and-use tables, Cebr analysis

The economic impact of betting shops is not, however, confined to this direct contribution.

We used Cebr’s in-house input-output models to produce multipliers for betting shops

specifically, which led to the finding that, for every £1 of GVA generated by betting shops,

an additional £0.61 of GVA is generated in the wider economy through indirect and

induced impacts. This betting shop GVA multiplier of 1.61 is illustrated and explained

further in Figure 2 below.

This multiplier produces an aggregate GVA impact of betting shops of just under £3.2

billion in 2009 and 2010.2 These estimates are presented in Table 1 below.

1 We note that, working with the SIC codes used on the horizontal axis in Figure 1, betting shops are a subset of 92 – the Gambling and Betting Services industry – which is a subset of R – the broader leisure or Arts, Entertainment & Recreation. Together, industries 90, 91, 92 and 93 constitute R.

2 Implicit here is the assumption that all spending rounds in the multiplier process occur in the same year in which the initial impact is experienced.

-

2

4

6

8

10

12

14

16

R. Arts,entertainment &

recreation

93. Sportsactivities andamusement &

recreationactivities

92. Gambling &betting activities

91. Libraries,archives, museums

& other culturalactivities

90. Creative, arts& entertainment

activities

BETTING SHOPS

GV

A £

bill

ion

s)

6


Table 1: Total absolute impacts of UK betting shops (£ millions)

Economic impacts of betting shops 2009 2010

Direct GVA contribution (£m, current prices) 1,966 1,973

Total GVA impact (£m, current prices) 3,155 3,168

Source: Cebr analysis

Figure 2: GVA multiplier for the UK betting shop industry


We have also found that the contribution to the economies of England, Wales and the

English Government Office regions is typically between 0.1 and 0.2 per cent of their

aggregate (national or regional) GVA. The outlier is the North East, where betting shops are

estimated to contribute 0.4 per cent of the region’s total GVA.

Furthermore, our regional input-output models allowed us to estimate national and regional

GVA multipliers for betting shops. These range from 1.35 in Wales to 1.59 in London,

meaning that between 87 and 99 per cent of the impact of betting shops is felt within those

countries and regions.

Direct impact £1

Indirect impact £0.29

Induced impact £0.32

Consumption expenditure in betting

shops triggers their supply response. In

‘producing’ or providing their services, betting

shops generate additional value added.

Assume sufficient consumption expenditure

in betting shops to generate £1 of GVA. This

£1 of GVA is the direct GVA impact of the

relevant increment in final demand expenditure.

+

To increase their supply, betting shops must

increase their demands on their suppliers, who increase demands on

their suppliers and so on through the supply

chain. This generates the indirect impact, an

increase in GVA throughout the supply

chain of £0.29 for every additional £1 betting

shops GVA

+

The combined direct and indirect impacts have an

impact on household income throughout the

economy, through increased employment,

profits etc. A proportion of this income will be re-spent on final goods and services,

producing a supply response by the producers

of these goods/services and further impacts through their supply chains etc.

This produces the induced impact of £0.32 for every additional £1 of betting

shops GVA

Betting shops GVA multiplier = £1.61

7


We also estimate that betting shops account for 0.2 per cent of total UK employment,

equating to over 41 thousand full-time equivalent (FTE) jobs.

We set this in context in Figure 3 in which, as with GVA, we illustrate the direct contribution

of betting shops relative to the Arts, Entertainment & Recreation sector as a whole, but also

relative to the leisure sector’s constituent industries. This shows that betting shops are

responsible for about 9 per cent of the FTE jobs contribution made by the aggregate sector

and about 50 per cent of the contribution made by the gambling and betting services

industry.

Figure 3, therefore, suggests that, while betting shops are relatively labour intensive

compared to the gambling and betting services industry – of which betting shops form part

– they are significantly less labour intensive than the broader Arts, Entertainment &

Recreation sector.

Figure 3: Direct employment contribution of betting shops relative to the Arts, Entertainment & Recreation sector (SIC 1-digit level) and its constituent industries (SIC 2-digit level), 2009

Source: ONS Business Register & Employment Survey, Cebr analysis

However, as with GVA, the employment impact of betting shops is not confined to this

direct jobs contribution. Using Cebr’s in-house input-output models to produce employment

multipliers for the betting shop industry, we found that, for every 1 FTE job in betting

shops, an additional 0.53 of a job is supported in the wider economy through indirect and

induced impacts.

This produced an estimated total employment impact of betting shops of 63 thousand FTE

jobs in 2009 – or 0.3 per cent of the total UK workforce. The number of FTEs in betting shops

-

100

200

300

400

500

600


recreation



91. Libraries,archives,

museums & othercultural activities


activities


BETTING SHOPS

FTE

job

s (‘

00

0s)

8


suffered a 1.7 per cent decline in 2010. Consequently, our estimate of the aggregate

employment impact for that year would drop to about 62 thousand FTE jobs.

We have also found that, in most cases, the employment multipliers for England, Wales and

the English regions are between 98 and 99 per cent of the UK multiplier, meaning that

between 98 and 99 per cent of the employment contribution made by betting shops is felt

within the same geographical boundaries in which the initial expenditure (and hence direct

GVA impact) occurs. The only exceptions are Wales (88 per cent), the North East of England

(92 per cent), the North West (95 per cent) and South West of England (94 per cent).

Local economic impacts of fewer new betting shops

Presently, betting shops are part of the A2 Use Class under the planning system. This Use

Class covers financial and professional services. However, if new regulations are introduced,

the expectation is that betting shops could be re-classified as part of a new gambling-specific

Use Class.

Because bookmakers tend to expand their businesses by opening new betting shops in

vacant commercial lots (on High Streets and adjacent areas), such expansion can often entail

a change in the Use Class of the relevant lot, for example, from an A3 Use Class business

(such as a restaurant or café) to an A2 Use Class business to facilitate the new betting shop.

Such changes are, in many if not most circumstances, largely automatic.

The bookmakers that we interviewed, however, indicated that, even under the current

framework, achieving permission to change a lot’s Use Class can be difficult when the

proposed new business is a betting shop. This was largely attributed by the interviewees to

local community biases against betting shops. They also provided what appear to be fairly

concrete examples of permissions being denied despite a strong economic case – in terms of

jobs and investment – and regulatory case – under the existing planning framework – for

such permissions.

The bookmakers we interviewed indicated that moving to a new Use Class structure would

compound these difficulties, severely limiting their ability to expand and bring much-

needed jobs, investment and vibrancy to ailing High Streets. Specifically, they indicated that

new regulations could reduce the proportion of successful new openings by anything

from 30 to 75 per cent of planned openings – depending, of course, on the volume of

planned openings and on the strength or otherwise of local community biases against

betting shops in the areas where these openings are planned.

The opportunity cost of denying permissions for new betting shop openings is not

negligible, as demonstrated by the macroeconomic impacts of betting shops outlined above.

While these impacts are by no means overwhelming, in the current economic environment, a

couple of tenths of a percentage point could mean the difference between achieving and not

achieving economic growth. At the individual level, a typical betting shop employs

between 4 and 7 persons, meaning that new Use Class regulations, to the extent that they

stop new betting shops opening, are likely to stop new jobs being created, especially

when the tough economic environment means there may be little else to populate the

elevated proportion of vacant commercial lots on the High Street and surrounding areas.

9


Betting shops also contribute substantially to the employment of women and young people

in the UK. Cebr estimates that, this year, betting shops employ a total of about 55 thousand

persons, 14 thousand of whom are aged 18-24 and about 31 thousand of whom are women.

A new planning system for betting shops, therefore, risks exacerbating unemployment in the

UK, particularly:

in areas already suffering above the national average rate of joblessness – namely the

North East, Yorkshire and The Humber, the West Midlands and Wales; and

amongst those worker groups already facing the most challenging labour market

conditions – namely 18-24 year-olds and females.

In other words, insofar as new Use Class regulations further restrict the opening of new

betting shops, they are liable to damage the employment prospects of women and young

people, particularly in areas where unemployment is already high.

Fewer openings of betting shops could also deprive local economies of an important source

of investment that itself sustains local jobs. Opening new betting shops often requires

significant re-fitting, re-decoration and equipment purchases, thus supporting jobs in the

manual trades, in wholesale materials providers, equipment manufacturers etc. Cebr

estimates that, in today’s money, bookmakers have already invested about £2 billion in local

economies through the opening of new betting shops and the ‘new-style’ re-fitting of betting

shops that already existed before the most recent changes in the industry. (See section 4.1 of

the main report.) This equates with a £150 to £200 thousand investment per betting shop.

High Street vacancies and the economic environment facing the broader

retail sector

The UK economy has been under considerable pressure since late 2008. Cebr’s sectoral

models of the UK economy predict that many types of retailer will continue to suffer in 2012

and 2013 before only gradually recovering.3

This reveals that the steep declines in retail sales in the period 2008-2009 took their heaviest

toll in terms of failing businesses in those years. Business failures have stabilised somewhat

in 2010, at least to levels that are closer to pre-recession levels even though retail sales

volumes have continued to fall.

Retail unit vacancies also grew rapidly in the 2008-2009 period and, despite a fall in business

failures, vacancies in 2010 remained elevated at their 2009 level, suggesting that those

businesses that did survive were in consolidation mode. While retail unit vacancies have

fallen consistently since 2010, they are still well above pre-recession levels and are expected

to remain between 2.5 and 3.0 per cent above their 2007 level until at least 2014 or 2015.

These are vacancies that could, in theory, be occupied by betting shops and, given the

retail environment on the high street, the opportunity cost of doing so (in terms of the

3 We have drawn principally on Cebr’s Industry Watch analysis in which, for BDO LLP, we predict business failures by broad industry sector over the coming 18 to 24 months.

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benefits that could be expected from the vacancy’s next best use) could well be zero.

Arguably, this lends further support to the case for not unduly restricting the opening of

betting shops through new planning regulations. Such undue restriction would result in the

UK and its constituent economies foregoing the economic benefits of more betting shops –

outlined above and more extensively in the main report – despite there being little else to

occupy vacant commercial lots given the tough environment facing the retail sector in

general.

Furthermore, with vacancies remaining elevated with little sign of a strong recovery anytime

soon, and local authorities already struggling financially with the depressed economy (and

consequent commercial lot vacancies) and with fiscal cuts, failing to fill these vacancies

with betting shops when there is no viable alternative use, could deprive local

Government of a potential source of increased revenues from business rates.

In 2010, business rates from betting shops provided UK Local Government with revenues of

over £58 million, an amount which could be increased to plug budgetary gaps left by fiscal

cuts if the opening of new betting shops is not unduly restricted. In the event that such

openings do become unduly restricted, the current economic environment facing much of

the retail sector and the fact that vacancies are expected to remain elevated for the

foreseeable future means that there are likely to be few other opportunities for local

authorities to plug these gaps.

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1 Introduction and background

This is the report on a study by Centre for Economics and Business Research (Cebr) on the

economic size of betting shops and the impact of the betting shop industry on the UK

economy. The study was commissioned by the Association of British Bookmakers (ABB).

1.1 Betting shops in context

Betting shops were legalised in 1960, largely in response to public demand for off-course

betting facilities. Thereafter, the number of betting shops in the UK grew rapidly and there

were almost 16,000 by 1968. The betting shop industry, at that time, lacked concentration

with small operators playing a prominent role. The number of betting shops has been in

decline since the late 1960s and the industry has become increasingly concentrated, with the

majority of betting shops now in the hands of a small number of major operators.

There were an estimated 9,000 shops in the UK in 2010, over 83 per cent of which were run

by five companies.4 Approximately 90 per cent of all betting shop industry revenues are

likewise attributable to these five companies, suggesting that, on average, each of their

shops generates more revenue than those of their smaller competitors.5 According to the

Gambling Commission, just over two in every three betting shops were run by one of three

major players: Ladbrokes, William Hill and Gala Coral Group.6

Betting shops occupy a prominent position within the UK gambling sector. The gambling

sector achieved revenues (gross gambling yield - GGY) of approximately £5.7 billion

according to the Gambling Commission.7 Just under £3.0 billion of this was attributable to

the betting industry.8 Betting shops are estimated to have generated about 88 per cent of this

£3.0 billion total, making them by far the most significant single contributor to gambling

sector revenues. Betting shops are responsible for slightly less than one half of the gambling

sector’s total revenues, which also make them the most important element of the broader

gambling sector in revenue terms.

Betting shops also contribute significantly to employment. In 2009, they provided 27

thousand full-time jobs and 22 thousand part-time positions. However, this total of 49

thousand is estimated to have fallen to just over 46 thousand in 2010, with a much more

significant drop in part-time positions. Meanwhile, based on Gambling Commission data,

we estimate that the gambling sector as a whole provided 117,111 jobs (full- and part-time)

in 2009, meaning that betting shops accounted for approximately 42% of jobs in the

gambling sector.

The same data suggest that betting shops are the most significant employer in the sector,

employing almost three times as many people as the next largest gambling industry

4 This 9,000 estimate is based on ABB’s estimate of 8,600 in Britain and about 400 in Northern Ireland. 5 Deloitte, The Full Picture: An economic impact of the British betting industry (commissioned by Ladbrokes). 6 Gambling Commission, Gambling Industry Statistics: 2009/10, Table 1. 7 Estimate for 2009-2010. 8 Gambling Commission, page 4

12


employer, namely bingo halls. Even at the national level, betting shops contribute noticeably

to employment: in 2009 they employed 0.2 per cent of all employed people.

1.2 Purpose of this study

Existing assessments of the economic impacts of betting on the UK economy have tended to

focus on the value of the betting industry as a whole, including not only betting shops but

also on-track and remote betting (the latter including telephone, internet sportsbook and

internet exchange betting). We refer, in particular, to the study by Deloitte, entitled “The

full picture: An economic impact of the British Betting Industry”, January 2010.

The Deloitte study estimated that the entire betting industry (using the aforementioned

wider definition) contributed £3 billion in direct gross value added (GVA) to the British

economy in 2008 (equating to 0.2 per cent of GDP), as well as 40,700 full-time equivalent

(FTE) jobs. Furthermore, through the industry’s links with other sectors in the supply chain,

the total contribution was estimated at £6 billion and about 100,000 FTE jobs (about 0.3 per

cent of total UK employment).

The purpose of this report is to drill deeper to examine the specific economic impact of

betting shops on the High Street for the UK as a whole and separately for England, Wales

and each of the English Government Office regions. What the report demonstrates is that

betting shops themselves are responsible for a significant proportion of the benefits to the

UK economy of the entire gambling and betting services industry. Specifically, we find that

betting shops are responsible for about two-thirds of the Deloitte estimate of the wider

betting industry’s direct impact of £3 billion and just over half of the total aggregate impact

of £6 billion estimated by Deloitte.9

Cebr’s interviews with representatives of the betting shop industry (which are discussed

later in the report) reveal that betting shops also employ a disproportionately high number

of comparatively low-skilled and young individuals. Those individuals who might have

difficulty gaining employment elsewhere can, therefore, find employment with betting

shops. As such, betting shops perform a valuable social function, helping people from these

vulnerable groups to find employment.

1.3 Structure of this report

This report is structured as follows:

Section 2 sets out the methodology, data and assumptions underlying our study.

Section 3 provides the results of our macroeconomic impact assessment of betting shops

in the UK, England, Wales and the English Government Office regions.

9 The implicit conclusion one can draw from this is that the supply chain supported by betting shops is not as strong as for the wider betting industry. But this also means that betting shops are more valuable in terms of jobs that non-betting shop betting services. This is apparent from the aforementioned Gambling Commission statistics and is demonstrated in section 3 of this report.

13


Section 4 examines the local economic impacts of reduced numbers of new betting

shops as a result of changes to the planning regime governing their opening.

Section 5 considers high street vacancies in the context of the tough economic

environment facing the broader retail sector and the economic implications of denying

the use of such vacancies by betting shops.

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2 Methodology and assumptions

There were three broad objectives for the study, namely:

1. To establish the macroeconomic impact of betting shops in each of the UK, England,

Wales and the English Government Office regions;

2. To examine the potential local economic impacts of changes in the planning regulations

governing the opening of betting shops; and

3. To analyse vacant commercial lots on the High Street in the context of potential changes

in the planning rules as applied to betting shops, as well as the tough economic

environment facing the broader retail sector. These are vacancies that could, in theory,

be occupied by betting shops with all their attendant benefits and with zero opportunity

cost in terms of alternative uses.

We describe the methods underlying each of these three parts in what follows.

2.1 Estimation of the economic impacts of betting shops

To establish the size and economic impacts of the betting shop industry, we adopted the

framework provided by the ONS’ supply-and-use tables, the most detailed official record of

how the industries of the economy interact with other industries, with consumers and with

international markets in producing the nation’s GDP and national income.

Making use of the supply-and-use framework to analyse a relatively small industry such as

betting shops – which is only a subset of an industry at the level of disaggregation provided

by this framework – is one of the best means of ensuring consistency with the national

accounting framework.

Methods used in the UK-level analysis

The process of embedding a disaggregated industry, such as betting shops, involves

assigning that industry a role within the supply-and-use tables. For the betting shop

industry, the starting point was estimates of the total income of betting shops in Great

Britain. These data were supplied by ABB, which produces them as part of its annual

economic modelling of the industry. The data are collated from the biggest betting shop

companies and uplifted for estimates of the numbers of smaller companies and independent

betting shops.

We assumed that the total income of the betting shop industry corresponds with the total

demand for betting shops’ services.10 This was followed by a process of backward induction

10 The UK Office for National Statistics (ONS) system of national accounts is built on Standard Industrial Classifications (SIC), the most recent being SIC 2007. The SIC system is used to classify product and service categories and producing industries using the same coding system. However, not all of a product or service category is necessarily produced by the corresponding industry and not necessarily all of

15


through the supply-and-use tables, involving (i) matching the demand for betting shop

services to their supply; (ii) establishing the corresponding production, income and

expenditure accounts for the betting shop industry, including the industry’s supply chain;

and (iii) adjusting the supply-and-use tables to ensure that they are re-balanced to GDP

under the production, income and expenditure approaches to its calculation.

Having assigned a role for betting shops within the supply-and-use framework, we had the

foundation for establishing:

The economic size (or direct impact) of the UK’s betting shop industry, using standard

measures of GVA11 – and, from this, the percentage contribution to GDP – exchequer

contributions and employment; and

The wider economic impact of betting shops on the UK economy, using Leontief input-output

modelling to estimate a full set of (matrix) multipliers capturing direct, indirect and

induced effects of betting shops on output, GVA and employment.

We use the multipliers in association with the direct impacts data to produce estimates of

the total impacts of the industry through the supply chain response (indirect impacts) and

the boost to household incomes and expenditure in the wider economy (induced impacts).

Methods used in the national and regional analyses

The starting point in determining the size of the betting shop industry in England, Wales

and the English regions was to allocate the shares of the UK betting shop industry

pertaining to these nations and regions. We did this for GVA using the regional allocation

of betting shop premises suggested by the aggregated data provided by the companies that

responded to our questionnaire and participated in our in-depth interviews (see subsection

2.2 below).

Having completed the UK-level input-output analysis, we produced equivalent sets of

multipliers for each of England, Wales and the English Government Office regions. Total

GVA and employment impacts were obtained by first estimating the relevant region /

country multipliers.

The key issue with producing regional technical coefficients12 is that regional propensities to

import are much higher than national propensities, meaning local borders are more porous

an industry will be dedicated to the production of the corresponding product or service category. (Note we use ‘product category’ and ‘product or service category’ interchangeably throughout the report.)

11 GVA or gross value added is a measure of the net value of goods and services which, in the national accounts, is the value of industrial

output less intermediate consumption. That is, the value of what is produced less the value of the intermediate goods and services used as inputs to produce it. GVA is also commonly known as income from production and is distributed in three directions – to employees, to shareholders and to government. GVA is linked as a measurement to GDP – both being a measure of economic output. That relationship is (GVA + Taxes on products - Subsidies on products = GDP). Because taxes and subsidies on individual product categories are only available at the whole economy level, GVA tends to be used for measuring things like gross regional domestic product and other measures of economic output of entities that are smaller than the whole economy. 12 Technical co-efficients are also known as direct requirements and represent the amounts of intermediate consumption of the various product/service categories from which the industry draws its inputs per £1 of output of the sector. The matrix of technical coefficients, which is calculated from the ‘domestic use’ table is the pre-cursor to the Leontief inverse matrix that produces multiplier estimates. Our

16


than national frontiers. We captured this through the use of ‘location quotients’. Location

quotients (LQs) involve adjusting the UK-wide technical coefficients to take account of

differing proportions of local demands being satisfied locally. They are interpreted as a

measure of the ability of a particular industry in a particular region to supply the demands

placed upon it by other industries and by final demand in the region.

Under this interpretation a LQ > 1 implies that the industry is more concentrated in the

region than in the UK as a whole, while a LQ < 1 implies that the industry is less

concentrated in the region than in the whole of the UK.13

However, these simple location quotients assume that the differences between the UK and

regional/national technical coefficients are the same across the sectors. Therefore, to capture

differences between the amounts of cross-industry trade at the regional / national level and

the UK level, we used more advanced Cross-Industry Location Quotients (CILQs). CILQs

take account of the relative sizes of the sectors providing and purchasing inputs. Under this

interpretation a CILQ < 1 implies that the supplying sector is relatively small compared to

the purchasing sector at the regional level, so some of the required inputs need to be

imported from elsewhere in the UK. A CILQ > 1 means there is no need to adjust the UK

technical coefficients as all the needs for the input can be met from within the region.

The results of this analysis are unique matrices of technical co-efficients for each of the

nations and regions. From these, the multiplier impacts of the betting shop industry in each

of the nations and regions can be determined.

Key data and assumptions

The aforementioned data supplied by ABB from its annual economic modelling of the

industry suggests that the total income of the betting shop industry is as presented in Table

2 below. (We note that total income includes the ‘gross win’ from betting – gross turnover

less payouts to winners – and ‘total gross margin’ from gaming machines.) The table shows

that total income of the GB betting shop industry was £2.8 billion in 2009, which remained

broadly stable in 2010.

Table 2 also present Cebr’s estimates for the UK as a whole, which required an estimated

rating by which to uplift the GB data to include Northern Ireland. To do so, we assumed that

there are about 400 betting shops in Northern Ireland, which is an additional 4.4% on top of

the total number of betting shops in GB. We uplifted the GB total income data on this basis.

‘domestic use’ table was estimated using the information in the 2009 supply table in combination with a 2005 ‘domestic use’ table in the ONS’ last set of input-output analytical tables.

13 These ‘simple’ location quotients are calculated as the share of the relevant sector in total regional GVA relative to the share of the relevant sector in total UK GVA.

17


Table 2: Total income of the betting shop industry, £millions

Year Total income (GB) Total income (UK)

(Cebr estimate)

2009 £2,768 £2,889

2010 £2,779 £2,901

Source: ABB, Cebr analysis

Because the latest supply-and-use tables – the framework for the analysis – relate to the year

2009, we took the 2009 total income figure for UK betting shops forward in the analysis. As

outlined above, we assumed that this total income figure represents total demand for betting

shop services (at purchasers’ prices). By assuming that demand is equal to supply, this

provided the relevant entry for total supply of betting shop services (also at purchasers’

prices) in the supply table.

From supply at purchasers’ prices were subtracted taxes less subsidies on products to

complete the supply table entries, culminating in an estimate of total domestic output of

betting shop services at basic prices. Taxes less subsidies were taken as the sum of net VAT

paid (excl. VAT paid through suppliers) and Amusement Machine Licence Duties paid, both

of which were included in the information provided by ABB. This amounted to an estimate

of £191 million for the UK betting shop industry in 2009.

This was, in turn, equated with the output (at basic prices) of the betting shop industry and

provided the starting point for developing the production and income accounts for betting

shops. For the income account, we developed estimates, based on the ABB data, of:

Taxes less subsidies on production: this was assumed to include business rates, employers’

national insurance contributions and betting shop and Gambling Commission licence

costs. The estimate here was £122 million.

Compensation of employees: this was taken as total employment costs in the ABB data less

employer’s national insurance contributions (because they are treated under taxes less

subsidies on production), giving an estimate of £661 million in 2009 for the UK betting

shop industry.

Gross operating surplus: we used ABB’s reported figures for profit before interest and tax

(2009 estimate of £647 million for UK betting shops) and added back a number of items

that were subtracted by ABB from revenues to arrive at this figure, including gross

profit taxes (£240 million), business rates (£57 million) and depreciation (estimated to be

87% of total non-VATable business costs including head office, or £295 million).14

14 The 87% estimate of the proportion of non-VATable business costs attributable to depreciation of fixed assets was put forward by Ladbrokes, who informed us that this was broadly accepted as typical of the entire industry.

18


To complete the production account, we developed a SIC-based product and service

breakdown of intermediate inputs demanded by betting shops, thus establishing a supply

chain used by betting shops in providing their services. This involved the following steps:

Identify total intermediate spend: this was taken as all costs, as reported to us by ABB, that

were unaccounted for up to this point of the analysis. This included other income costs

(£7 million), other machine costs (£78 million), SIS/Turf TV charges (£191 million), other

VATable business costs (£339 million) and other non-VATable business costs excl.

depreciation (£44 million).

Estimated own-industry intermediate consumption: we used the proportion of own-industry

intermediate consumption by the wider Gambling and Betting services industry (SIC

2007 2-digit code 92) as a basis for assuming the betting shops’ own-industry

intermediate consumption.

Treatment of horseracing and greyhound levies: these were included in the betting shop

industry supply chain. While these levies are collected by the Levy Board – a

Government intermediary – the monies are passed straight on to the racing industries.

The levies are thus effectively treated as payments for rights to supply bets on the races

provided by the racing industries.

Allocation of remaining intermediate spend across the other elements of the supply chain:

having subtracted own industry intermediate consumption from total intermediate

spend, we used the intermediate spending breakdown for the British betting industry

supplied in the Deloitte (2010) report, adapted for embedding within the supply-and-

use tables, to establish the remainder of the betting shop supply chain. The adapted

breakdown used by Cebr is presented in Table 3 below.

Table 3: Percentage breakdowns for remainder of intermediate spend based on SIC 2007 1-digit product/service categories

(SIC 2007 1-digit code)

Intermediate spend product / service category % of remaining intermediate spend allocated

to each

C Manufacturing 6%

E Water and sanitation 1%

G Wholesale & retail 2%

H Transportation & storage 3%

I Accommodation & food 1%

J Information & communications 39%

K Financial & insurance activities 2%

L Real estate 21%

M Professional and business services 15%

N Administrative & support service activities 9%

Q Human health & social work 1%

Source: ABB, Deloitte (2010), Cebr analysis

19


Having completed the income and production accounts for the betting shop industry, we

had the basis for assessing the direct impacts of the betting shop industry. Furthermore,

completion of the production account provided the ingredients required to assess the

multiplier impacts of betting shops through incorporation into Cebr’s input-output

modelling.

2.2 Analysing the local economic impacts of changes to the planning

regime for betting shops

We have sought to examine the potential local economic impacts of changes in the planning

arrangements governing the opening of betting shops using data supplied by and in-depth

interviews with representatives of the largest betting shop companies, namely Gala Coral,

Ladbrokes, Paddy Power and William Hill.

Methods used

Through the interviews and questionnaire, the objective was to establish how anticipated

changes in the planning regulations could impact on the business decisions of betting shop

owners, especially decisions related to expansion and contraction of their shops’ presence.

We sought to establish the number of betting shops that could be denied planning

permission, thus providing a basis for understanding the potential socioeconomic loss to

local High Street economies of these denied permissions, in terms of investment and output

foregone, jobs foregone and business rates foregone.

Because betting shops tend to provide significant proportions of part-time jobs and employ

high percentages of 18-24 year-olds, females and the disabled, we also sought to assess jobs

foregone in this context. Clearly, tackling the highest ever unemployment rate among 18-24

year olds is a national priority, the achievement of which would not be helped by denying

planning permission to new or expanding betting shops.


We undertook a literature review, including transcripts of Parliamentary debates, to

establish a chronological overview of the pertinent issues. Through the programme of in-

depth interviews, we explored with the major betting shop owners the strategies they use to

expand their businesses and the challenges they face under the current Use Class system.

Using the data supplied by the bookmakers in these interviews and in response to the

questionnaire developed for that purpose, we were able to establish a broad indication of the

probable effects of a new Use Class system on their ability to expand the presence of their

betting shops. This, in turn, provided the ingredients to assess the implications of such a

new Use Class for local economies, particularly for employment and regional investment.

20


The questionnaire developed for these purposes is provided in Annex I. (We note that, while

we received very healthy responses to the first part of the questionnaire, the bookmakers

determined that there were too many uncertainties to try to populate the second part.

Instead, broad orders of magnitude were discussed in the course of the face-to-face in-depth

interviews.)

2.3 Predicting high street vacancies in the retail sector

We have drawn on Cebr’s Industry Watch analysis in which, in conjunction with BDO LLP,

we predict business failures by broad industry sector for the next 1.5 to 2 years.

Methods used

This involved drawing out our analysis of the retail sector and reviewing the specific types

of businesses that are appearing more likely to fail given the broad economic environment

for retail. We used this, in conjunction with data from the Winter 2011/12 Colliers National

Retail Barometer to examine current commercial lot vacancies on High Streets and outlook

for vacancies going forward.

These are vacancies that could, in theory, be occupied by betting shops and, given the retail

environment on the High Street, the opportunity cost of doing so (in terms of the benefits

that could be expected from the vacancy’s next best use) could well be zero. This lends

further support to the case for not unduly restricting the opening of betting shops through

new planning regulations.


The UK economy has been under considerable pressure since late 2008. Hence, Cebr’s

sectoral model of the UK economy predicts that many types of retailer will continue to suffer

in 2012 and 2013 before gradually recovering.

For this part of the study, we set out to contextualise the broad retail and wholesale sector’s

performance in the past and present, discussing the sector’s business failures, sales volumes

and retail business unit vacancies since the recession. For this purpose, we used the data and

models underlying the Q1 2012 version of Cebr’s “Industry Watch” report for BDO LLP.

Looking deeper within the retail sector, we review the recent sales volumes performance of

food stores, household goods stores and clothing and footwear stores to identify the parts of

the retail sector in which businesses are most likely to fail and, thus, the kinds of shops that

are more likely to end up vacated.

21


3 The macroeconomic impacts of betting shops

This section sets out our findings on the size, economic contribution and economic impacts

of betting shops at the aggregate UK level and for each of England, Wales and the English

Government Office Regions. Section 3.1 assesses the economic contribution of betting shops

to UK GDP and contextualises this by providing a comparative analysis with broader

related industries and sectors of the economy. Section 3.2 presents our findings on

employment and section 3.3 our findings on contribution to the UK Exchequer.

3.1 Contribution of betting shops to GDP

Aggregate UK-level results

In broad terms, Cebr has discovered, through extensive investigation and economic

modelling of the latest official data that the betting shop industry accounts for

approximately 0.2 per cent of UK GDP. This equates with an absolute GVA contribution

of almost £2 billion in 2009.

While the contribution of the betting shops is small, especially when compared with some of

the very significant sectors of the economy (such as manufacturing and financial services), a

0.2 per cent contribution to GDP is not insignificant during these times of negative growth.

To set this in context, we compare the contribution of betting shops to that of the more

aggregate industries of which they form a part in Table 4 below. This shows that betting

shops are responsible for about 15 per cent of the economic contribution made by the

aggregate Arts, Entertainment and Recreation sector, which itself contributes about 1.3 per

cent of UK GDP. At the more disaggregated SIC 2-digit level, betting shops can be seen to

be responsible for about 40 per cent of the contribution made by the gambling and betting

services industry as a whole.

Table 4: Betting shops’ GVA contribution compared to the broader industry and sector of which they form part

SIC code Sector Contribution to GDP * Total GVA (£m, 2009 estimate) **

R ^ Arts, entertainment & recreation *** 1.3% 14,740

92 ~ Gambling and betting services 0.5% 4,810

N/A BETTING SHOPS 0.2% 1,966

* Includes an estimate of taxes less subsidies on products

** Excludes taxes less subsidies on products

*** This is the sector including the contribution of betting shops

^ SIC 2007 1-digit level

~ SIC 2007 2-digit level

Source: ONS supply-and-use tables, Cebr analysis

22


Figure 4 below provides an illustrative comparison of the GVA contributions of betting

shops with those of:

The aggregate 1-digit arts, entertainment and recreation sector, of which betting shops

form a part; and

The aggregate 2-digit industries that make up this aggregate 1-digit sector, including

gambling and betting activities (of which betting shops form a part) as well as the

creative and performing arts, the aesthetic arts and the sports activities industries.15

This is further illustrative of the important role played by betting shops in the wider

gambling and betting services industry, but also shows that the betting shop industry is

almost as important (in economic terms) as some of the other arts, entertainment and

recreation industries. For instance, the GVA contribution of the creative and performing arts

industry is only slightly larger than that of betting shops.

Figure 4: Size of betting shop industry relative to the other elements of the arts, entertainment and recreation sector

Source: Business Register & Employment Survey, Cebr analysis

However, the economic impact of betting shops in the UK is not confined to this direct GVA

contribution. We used input-output modelling to produce betting shop industry

multipliers, which led to the finding that, for every £1 of GVA generated by the betting

shop industry, an additional £0.61 of GVA is generated in the wider economy through

15 We note that, working with the SIC codes used on the horizontal axis in Figure 4, betting shops are a subset of 92 – the Gambling and Betting Services industry – which is a subset of R – the broader leisure or Arts, Entertainment & Recreation. Together, industries 90, 91, 92 and 93 constitute R.

-

2

4

6

8

10

12

14

16


recreation




91. Libraries,archives, museums

& other culturalactivities


activities

BETTING SHOPS

GV

A £

bill

ion

s)

23


indirect and induced impacts. This betting shops GVA multiplier of 1.61 is illustrated and

explained further in Figure 5 below.

Figure 5: The UK betting shops’ industry’s GVA multiplier


This produces an aggregate GVA impact of betting shops of an estimated £3.2 billion in

2009 and 2010.16 These estimates are presented in Table 5 below.

16 Implicit here is the assumption that all spending rounds in the multiplier process occur in the same year in which the initial impact is experienced.

Direct impact £1

Indirect impact £0.29

Induced impact £0.32

Consumption expenditure in betting

shops triggers their supply response. In

‘producing’ or providing their services, betting

shops generate additional value added.

Assume sufficient consumption expenditure

in betting shops to generate £1 of GVA. This

£1 of GVA is the direct GVA impact of the

relevant increment in final demand expenditure.

+



their suppliers and so on through the supply

chain. This generates the indirect impact, an

increase in GVA throughout the supply

chain of £0.29 for every additional £1 betting

shops GVA

+



economy, through increased employment,

profits etc. A proportion of this income will be re-spent on final goods and services,

producing a supply response by the producers

of these goods/services and further impacts through their supply chains etc.

This produces the induced impact of £0.32 for every additional £1 of betting

shops GVA

Betting shops GVA multiplier = £1.61

24


Table 5: Total absolute impacts of UK betting shops (£ millions)

Economic impacts of betting shops 2009 2010

Direct GVA contribution (£m, current prices) 1,966 1,973

Total GVA impact (£m, current prices) 3,155 3,168


Results for England, Wales and the English regions

Our estimates of the economic size (or direct economic contribution) of the betting shop

industry in England, Wales and the English Government Office regions are presented in

Table 6 below. This shows that the typical contribution of betting shops to the national and

regional economies varies between 0.1 and 0.2 per cent. The exception is the North East,

where our estimates suggest that the betting shop industry contributes 0.4 per cent of the

region’s GVA.

The total regional impacts presented in the last column are the result of applying the

national and regional multipliers in Table 7 to the direct GVA contributions in Table 6.

These are the national and regional equivalents of the figures presented in the second row of

Table 5 above.

Table 6: Direct absolute and percentage GVA contributions of betting shops in the nations and regions, plus total GVA impacts (including indirect and induced impacts)

UK nation / English region Direct GVA contribution

(£m) Direct contribution to

regional GVA (%) Total regional GVA impact

(£m)*

North East 146 0.4% 205

North West 238 0.2% 346

Yorkshire & The Humber 168 0.2% 252

East Midlands 79 0.1% 122

West Midlands 144 0.2% 219

East of England 114 0.1% 174

London 420 0.2% 627

South East 180 0.1% 270

South West 138 0.1% 202

Total England 1,628 0.2% 2,588

Wales 75 0.2% 101


As already noted, the estimates of the total GVA impact on the national and regional

economies are based on the multipliers presented in Table 7 below. This table presents our

findings for the national and regional GVA Type I and Type II multipliers. The table also

shows the size of the regional multipliers relative to the UK-wide multipliers, which is an

indicator of the impact of the relevant nation or region’s betting shop industry that stays

25


within that region. These national / regional multipliers range from 1.35 in Wales to 1.59 in

London, meaning that between 87 and 99 per cent of the impact of betting shops is felt

within those countries and regions.

Table 7: UK nation and region Type I and Type II GVA multipliers and in-region impacts

UK nation / English region Type I multipliers % of UK Type I Type II multipliers % of UK Type II

North East 1.19 92% 1.40 87%

North West 1.23 95% 1.45 91%

Yorkshire & The Humber 1.26 97% 1.50 93%

East Midlands 1.28 99% 1.54 96%

West Midlands 1.27 98% 1.52 95%

East of England 1.27 98% 1.52 95%

London 1.24 96% 1.49 93%

South East 1.24 96% 1.51 94%

South West 1.21 94% 1.46 91%

Total England 1.28 99% 1.59 99%

Wales 1.13 87% 1.35 84%


3.2 Contribution of betting shops to employment

Cebr’s estimates suggest that the betting shop industry accounts for 0.2 per cent of total

UK employment. This equates with 41 thousand FTE jobs.17

We compare the contribution of betting shops to that of the more aggregate industries of

which they form a part in Table 8 below. This shows that betting shops are responsible for

about 9 per cent of the FTE jobs contribution made by the aggregate arts, entertainment and

recreation sector, which itself contributes about 2.2 per cent of UK employment. At the

more disaggregated SIC 2-digit level, betting shops can be seen to be responsible for about

50 per cent of the contribution made by the gambling and betting services industry as a

whole.

These comparisons suggest that, while betting shops are relatively labour intensive

compared to the Gambling and Betting services industry as a whole, they are much less

labour intensive that the broader Arts, Entertainment and Recreation sector.

17 FTE stands for full-time equivalent. FTE jobs or FTE employment includes employees as well as the self-employed, sole traders, partnerships etc. We note that our estimate of direct FTE jobs provided by betting shops is remarkably similar to Deloitte’s finding of 40,700 FTE jobs for the British betting industry. There are a number of possible reasons for this, including primarily: (i) the method by which part-time jobs are converted into FTE jobs; and (ii) whether employees only are counted or whether the self-employed, sole traders etc. are included. Cebr’s estimate is based on the data supplied by ABB from its economic modelling of the industry. The sources underlying Deloitte’s estimates are not apparent from their report.

26


Table 8: Betting shops’ employment contribution relative to some of UK’s largest sectors

SIC code Sector

Contribution to employment

Total FTE jobs

R ^ Arts, entertainment & recreation *** 2.2% 522,600

92 ~ Gambling and betting services 0.4% 86,600

N/A BETTING SHOPS 0.2% 41,050

*** This is the sector including the contribution of betting shops

^ SIC 2007 1-digit level

~ SIC 2007 2-digit level


As with Figure 4 above, Figure 6 below provides the same illustrative comparison of the

employment contributions of betting shops with those of:

The aggregate 1-digit Arts, Entertainment and Recreation sector, of which betting shops

form a part; and

The aggregate 2-digit industries that make up this aggregate 1-digit sector, including

Gambling and Betting services (of which betting shops form a part) as well as the

creative and performing arts, the aesthetic arts and the sports activities industries.

This is further illustrative of the important role played by betting shops in the wider

gambling and betting services industry.

Figure 6: Size of outbound travel relative to all of the 20 broad SIC 1-digit sectors by FTE employment


-

100

200

300

400

500

600


recreation



91. Libraries,archives,

museums & othercultural activities


activities


BETTING SHOPS

FTE

job

s (‘

00

0s)

27


However, as with GVA, the employment impact of betting shops is not confined to this

direct jobs contribution. We used input-output modelling to produce a betting shop

industry employment multiplier, finding that, for every 1 FTE job in betting shops, an

additional 0.53 of a FTE job is supported in the wider economy through indirect and

induced impacts. This betting shop industry employment multiplier of 1.53 is illustrated

and explained further in Figure 7 below.

This produces an estimated total FTE employment impact of betting shops of 63 thousand

FTE jobs in 2009 – or 0.3 per cent of the total UK workforce. The number of FTEs in betting

shops suffered a 1.7 per cent decline in 2010. Consequently, our estimate of the aggregate

employment impact for that year would drop to about 62 thousand FTE jobs.

Figure 7: The UK betting shop industry’s employment multiplier


Results for England, Wales and the English regions

The direct absolute contributions to employment in England, Wales and the English

Government Office regions are presented in Table 9 below. The total number of FTE jobs

supported through direct, indirect and induced impacts of betting shops is also shown –

these being the result of applying the national and regional multipliers in Table 10 to the

direct employment contributions in Table 9.

Direct impact 1 FTE

Indirect impact0.25 FTE

Induced impact 0.28 FTE

Consumption expenditure in betting shops triggers their supply response. In ‘producing’ or providing

their services, betting hire additional staff. Assume sufficient consumption expenditure in betting

shops to generate 1 additional FTE job. This 1

FTE job is the direct employment impact of the relevant increment in final

demand expenditure.

+



their suppliers and so on down the supply chain.

This generates the indirect impact, an

increase in employment throughout the supply

chain of 0.25 of a FTE for every additional FTE in

betting shops

+



economy, through increased employment, profits etc. A proportion of this income will be re-spent on final

goods and services, producing a supply response

by the producers of these goods/services and further

impacts through their supply chains etc. This produces the induced

impact of 0.28 of a FTE for every additional FTE in

betting shops

Betting shops employment multiplier = 1.53

28


Table 9: Direct and total absolute employment impacts of betting shops in the nations and regions

UK nation / English region Direct employment

contribution (FTE jobs) Total regional employment

impact (FTE jobs)

North East 3,051 4,128

North West 4,967 6,932

Yorkshire & The Humber 3,513 5,057

East Midlands 1,659 2,454

West Midlands 3,010 4,386

East of England 2,385 3,493

London 8,767 12,765

South East 3,751 5,502

South West 2,892 4,037

Total England 33,996 51,673

Wales 1,566 2,028


Table 9 shows, as noted, our findings for the national and regional GVA Type I and Type II

multipliers. The tables also show the size of the regional multipliers relative to the UK-wide

multipliers, which is an indicator of the impact of the relevant nation or region’s betting

shop industry that stays within that region.

The employment multipliers for England, Wales and the English regions are between 98 and

99 per cent of the UK multiplier, meaning that between 98 and 99 per cent of the

employment contribution made by betting shops is felt within the same geographical

boundaries in which the initial expenditure (and hence direct GVA impact) occurs. The only

exceptions are Wales (88 per cent), the North East of England (92 per cent), the North West

(95 per cent) and South West of England (94 per cent).

Table 10: UK nation and region Type I and Type II employment multipliers and in-region impacts

UK nation / English region Type I multipliers % of UK Type I Type II multipliers % of UK Type II

North East 1.16 92% 1.35 88%

North West 1.19 95% 1.40 91%

Yorkshire & The Humber 1.22 98% 1.44 94%

East Midlands 1.24 99% 1.48 96%

West Midlands 1.23 98% 1.46 95%

East of England 1.23 98% 1.46 95%

London 1.23 98% 1.46 95%

South East 1.23 98% 1.47 96%

South West 1.17 94% 1.40 91%

Total England 1.24 99% 1.52 99%

Wales 1.10 88% 1.30 84%


29


3.3 Contribution to the UK Exchequer

Cebr’s estimates suggest that the betting shop industry contributed £1.0 billion to the UK

Exchequer in 2010, or 0.3 per cent of HMRC’s aggregate tax take. This aggregate

contribution is broken down in Table 11 below.

Table 11: Contributions of betting shops to the UK Exchequer, 2010 data

Tax category Tax type Tax paid (£m)

Indirect taxes VAT (incl. through suppliers) 242

AMLD 71

Taxes on production Business rates 56

Employer NICs 52

Licence costs 6

Taxes on income Employee income tax 93

Employee NICs 45

Corporation tax 117

Gross profit tax 220

TOTAL TAX PAID excl. racing levies 1,002

Source: ABB, ONS, HMRC, Cebr analysis

The £1.0 billion contribution shown in the table includes £242 million in VAT – including £97

million paid through suppliers – and another £71 in Amusement Machine Licensing Duty

(AMLD). These are taxes on the services sold (transactions made) in betting shops.

Taxes on production include business rates and employers’ national insurance contributions

(NICs), as well as Gambling Commission and betting shop licensing fees. These amounted

to £114 million in 2010.

Taxes on income provided the lion’s share of the industry’s total tax contribution, with a

substantial £220 million gross profit tax bill on top of a £117 million corporation tax

obligation. Employee-related taxes on income amounted to another £138 million.

30


4 Local economic impacts of changes to the planning regime

for betting shops

This section provides a chronological overview of the pertinent issues. The strategies used

by bookmakers to expand their business are discussed, as are the challenges they face under

the current Use Class system. Then, probable effects of a new Use Class system on their

ability to expand are discussed. The implications of such a new Use Class system for local

economies, particularly for employment, regional investment and competition, are then

highlighted.

4.1 Chronological overview of the issues18

Betting shops were legalised in 1960, partially in response to public demand for betting

facilities for off-course horseracing. In response to concerns that it would be seen to be

promoting gambling, the Government’s legislation forbade betting shops from offering

comfortable seating, refreshments, televised sports events or toilets. Nevertheless, betting

shops proved popular and their numbers peaked at 15,782 in 1968.

Since 1968, the betting shop industry has experienced a “growing concentration of

ownership” as big players have bought up independent shops. This caused the UK-wide

number of betting shops to fall to 9,400 by the early-1990s. This process continued, and the

number of betting shops had fallen to 8,400 by the early 2000s. There are 8,500 betting shops

in the UK today.19

This pro-consolidation trend was accelerated by legislative changes which came into force in

1986. Principally, these permitted betting shops to offer non-alcoholic refreshments and to

televise sporting events. This induced competition in the attractiveness and comfort of

betting shops. Because competing in this sphere required significant capital investments,

which only large companies could afford, these legislative changes arguably contributed to

the consolidation that has been observed since.

The post-1986 period has been one of great change for the betting shops industry. In 1987,

betting shops were re-classified as part of the A2 Use Class for “financial, professional and

other services". The 1987 Use Class structure was designed to embrace planning

deregulation and facilitated the expansion of betting shops. For example, the structure

meant that a betting shop moving into a vacant commercial lot which had previously been

used by an A3 Use Class business was supposed to be largely automatic.20

Further beneficial reforms took place in the late-1990s and early-2000s. Sunday opening was

permitted, restrictions on betting shop displays were relaxed and betting duty was

decreased from 7.75 to 6.75 per cent. Finally, Amusement-with-Prize (or fruit) machines

18 Data in the chronological overview are largely sourced from the Encyclopaedia of British Horseracing, 2005, Vamplew and Kay, pp. 46-51. 19 Written evidence submitted to Parliament by the Association of British Bookmakers (GA 035). 20 A3 Use Class businesses are restaurants and cafes.

31


were legalised in betting shops in 1996, paying out a maximum jackpot of £10. The jackpot

ceiling was increased to £25 in 2002.

In 2007, the Gambling Act (2005) came into force. The Act was met with mixed reaction by

the betting shop industry.

In one regard, changes to licensing procedures received a positive reception. They enabled

betting shops to extend evening opening hours throughout the year. In theory, this should

have boosted revenues and (possibly) profits.

Other aspects of the Gambling Act (2005) were less favourably received by the industry.21

The Act introduced a system of “dual regulation” under which betting shops are now

regulated by the Gambling Commission and local authorities. This increased regulatory

costs significantly, decreasing betting shop profits and increasing the prices which

customers faced. This regulatory framework also increased the scope for local planning

authorities to arbitrarily deny betting shops permission to open in their jurisdictions, even in

cases where a company was applying to open a betting shop in a vacant commercial lot

which had previously been used by an A3 Use Class business.22

The Budd report recommended that the betting shop (and wider gambling) industry should

be treated like any other in terms of regulation and taxation. The report suggested general

deregulation, including allowing increased opening hours, the sale of alcohol and the

provision of live entertainment. Representatives of the industry regretted that the 2005 Act

failed to incorporate many of the Budd report’s recommendations. They reasoned that

legislators had focussed too heavily on issues such as problem gambling and moral

objections to betting shops. Hence, they failed to formulate the Act in line with an objective

analysis of the social and economic merits and demerits of betting shops.23

4.2 Challenges of a new Use Class for betting shops

Cebr conducted interviews with four betting shop companies – Gala Coral Group,

Ladbrokes, Paddy Power, William Hill – focussing on the challenges their expansion plans

are likely to face if a new Use Class system comes in to force. Presently, betting shops are

part of the A2 Use Class which covers financial and professional services. If new regulations

come into force, they are likely to re-classify betting shops as part of a new gambling-specific

Use Class.24

21Written evidence submitted to Parliament by William Hill (GA 22). http://www.publications.parliament.uk/pa/cm201012/cmselect/cmcumeds/writev/gambling/m22.htm

22 Some local planning authorities’ arbitrarily denying companies’ requests to open betting shops in their jurisdictions was highlighted in Cebr’s interviews with representatives of betting shop companies. Interviewees reported that these denials were often not based on an analysis of the social and economic merits and demerits of opening new betting shops locally. Rather, they were based largely on the intuitions and predispositions of local planners.

23 Written evidence submitted to Parliament by William Hill (GA 22).

24 This scenario was highlighted as a distinct possibility by interviewees from three major bookmakers. The possibility of moving betting shops into their own specific Use Class has also been floated in Parliament. In a November 2010 debate on Bookmakers and Planning, D. Lammy, MP, requested that bookmakers be assigned their own specific, or sui generis, Use Class in the same manner as casinos and amusement arcades. See: House of Commons Library, “Planning Use Classes”, Standard Note SN/SC/1301, 24 Feb 2012, pp 6.

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmcumeds/writev/gambling/m22.htm

32


Because bookmakers tend to expand their businesses by opening new betting shops in

vacant commercial lots (on High Streets and adjacent areas), such expansion can often entail

a change in the Use Class of the relevant lot, for example, from an A3 Use Class business

(such as a restaurant or café) to an A2 Use Class business to facilitate the new betting shop.

Such changes are, in many if not most circumstances, largely automatic.

The bookmakers that we interviewed, however, indicated that, even under the current

framework, achieving permission to change a lot’s Use Class can be difficult when the

proposed new business is a betting shop. This was largely attributed by the interviewees to

local community biases against betting shops. They also provided what appear to be fairly

concrete examples of permissions being denied despite a strong economic case – in terms of

jobs and investment – and regulatory case – under the existing planning framework – for

such permissions.

Respondents gave concrete examples of betting shop companies having their applications to

open in vacant A3 lots denied. In East Ham, local officials rejected one company’s

application to open a new betting shop in such a vacant property. This was despite both (a)

the Use Class framework’s allowing for vacant A3 properties to be used by an A2 business

without special planning and regulatory procedures being invoked and (b) the applicant’s

potential to fill a vacant lot in East Ham, bringing investment and jobs to the area.

Respondents indicated that moving to a new Use Class structure would compound these

difficulties, severely limiting their ability to expand and bring much-needed jobs and

investment to ailing UK high streets.

If new regulations re-classifying betting shops as part of a new gambling-specific Use Class

come into force, one respondent hypothesised that this would increase the frequency with

which local authorities reject his business’s applications to open new betting shops in vacant

commercial lots. He estimated that 30-50 per cent of the new betting shops which his

business applies to open would have their applications declined under new regulatory

procedures.

Other respondents echoed this opinion, expecting that new regulations would make it easier

for local magistrates to block betting shop companies’ expansion plans. In particular, the

comparatively easy switch from an A3 property to an A2 property - which includes betting

shops – would be unlikely to persist under any new planning regime. There would almost

certainly be no comparatively easy switch from an A3 property to a gambling-specific Use

Class property under the proposed regulations.

Furthermore, respondents hypothesised that a new Use Class system would make it easier

for the local community to encourage local magistrates to block new betting shops.

Community biases against betting shops could mean that a new Use Class system might

increase the proportion of rejected betting shop applications, without reference to a reasoned

analysis of the social and economic for new betting shops.

One respondent indicated that his company’s expansion plans could be particularly

sensitive to such changes. He estimated that the new regulations, if they came into force,

would stop his business from opening 75% of its planned new betting shops.

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4.3 Economic implications of a new Use Class for betting shops

Moving to the new Use Class system, in which there is a gambling-specific Use Class, is

expected to have two principle negative consequences for the wider economy.

Firstly, the increased difficulty of opening new betting shops is expected to weigh more

heavily on small firms than larger ones, because small firms have fewer resources to push

for new shop openings. By making it comparatively difficult for small betting shop

companies to expand, such regulations could dampen competition in the betting shop

industry. However, it is also apparent that the larger companies might also be stifled if their

ability to change the location of existing shops is also further restricted.

One interviewee noted that, in response to the expectation of regulatory change, some of the

larger betting shop companies had begun to agglomerate their betting shops in particular

areas. This agglomeration, in which several betting shops owned by the same company are

concentrated in close proximity to each other, reduces the competitive pressure which large

betting shop companies face. We note that simply the threat of regulatory change has been

sufficient to induce this strategic reaction which can only serve to dampen competition, as

postulated above.

Secondly, the new system risks exacerbating unemployment in the UK by putting

downward pressure on the total number of betting shops in the economy. A typical betting

shop employs between 4 and 7 persons, meaning that new Use Class regulations, to the

extent that they stop new betting shops opening, are likely to stop new jobs being created.

Respondents indicated that the new regulations, if they come into force, could reduce the

proportion of successful new openings by anything between 30 and 75 per cent of

applications. The effect on employment could also, therefore, be substantial.

Betting shops employ a comparatively high proportion of low-skilled, young and female

workers – precisely the individuals who are presently facing the most severe labour market

challenges. Hence, the introduction of a new Use Class system is likely to prove particularly

restrictive for the employment prospects of workers in these groups.

The following diagram (Figure 8) captures contributions which the four large bookmakers,

taken together, have made to the employment prospects of young people and women in all

the regions of the UK. It also illustrates the bookmakers’ aggregate contribution to

employment in the regions.

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Figure 8: Four bookmakers’ contribution to regional employment for different groups25

Figure 8 shows that these four bookmakers, which together manage 69.7% of all British

betting shops, generated an estimated total of 37,000 jobs in the UK in 2011.26 Across the

country, they provided an estimated 9,500 jobs to 18- to 24-year-olds and 20,700 women.

These data throw into sharp relief that, insofar as new Use Class regulations restrict the

expansion of betting shops, they are liable to damage the employment prospects of women

and young people. These effects would be particularly damaging in the North East,

Yorkshire and the Humber, the West Midlands and Wales, where unemployment rates are

significantly above the national average.

Figure 9 highlights that these four businesses contribute significantly to regional investment.

Opening a betting shop usually costs between £150,000 and £250,000 depending on the

bookmaker and region.27 Opening new betting shops often requires significant re-fitting, re-

decoration and equipment purchases. Hence, openings support regional job creation and

wages for retailers, decorators and carpenters. Figure 9 shows our estimate of the total

amount which has been invested in the regions by the four betting shop companies that we

interviewed, in all the shops they have currently under management in the UK. In today’s

money, they have invested a total of approximately £1.3 billion.

25 The dataset from which Table 1 was derived was almost, but not quite, complete. Some respondents did not provide data for all the English regions. The missing data were interpolated. This point applies to all tables in this section of the report.

26 William Hill, Ladbrokes and Gala Coral Group together managed 67.8% of UK bookmakers in March 2010 (Gambling Commission). Paddy Power’s share of UK betting shops under management was not directly observable, but was inferred using data on (a) the number of shops which Paddy Power manages and (b) the number and proportion of UK betting shops which William Hill, Ladbrokes and Gala Coral Group manage together.

27 Northern Irish betting shops are associated with the highest investment shops because bookmaking is particularly profitable in Northern Ireland.

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Figure 9: Four bookmarkers’ contribution to regional investment

Figure 10 and Figure 11 infer the contribution of all UK bookmakers to regional employment

for the different types of employee. They also provide estimates for the contribution of all

UK bookmakers to regional investment.

Figure 10: Estimated contribution of all bookmakers to regional employment for different groups

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Figure 11: Estimated contribution of all bookmakers to regional investment

Figure 10 and Figure 11 expand the intuitions contained in Figure 8 and Figure 9 to the level

of the entire industry.28 Figure 10 shows that bookmakers are estimated to have contributed

substantially to the employment of women and young people, and to overall employment,

in the UK nations and English regions. Cebr estimates that, this year, betting shops employ a

total of 54,600 persons, 14,000 of whom are between the ages of 18 and 24 and 30,500 of

whom are women.

Figure 11 shows the total amount which Cebr estimates that betting shop companies have

invested in the regions, for all the shops they currently operate. They have invested an

estimated total of approximately £2.0 billion in today’s money.

In conclusion, the arguments provided by the interviewees from betting shop companies,

when combined with data on betting shops’ contributions to regional employment and

investment, suggest that the introduction of a betting shop-specific Use Class would bear

down on these metrics. The implementation of such a new Use Class structure could have a

disproportionately large impact on women and young people, who face particularly

challenging labour market conditions. There is also evidence that these measures could have

pronounced impacts in areas of the UK which are already suffering above-average

unemployment rates.

28 Figure 10 and Figure 11 infer the figures for all betting shops in the UK, on the basis of data provided William Hill, Ladbrokes, Gala Coral Group and Paddy Power, using the proportionality between the number of shops operated by these companies and the total number of betting shops in the UK (Gambling Commission).

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5 High street vacancies and the retail environment

The UK economy has been under considerable pressure since late 2008. Hence, Cebr’s

sectoral model of the UK economy predicts that many types of retailer will continue to suffer

in 2012 and 2013 before gradually recovering. This section of the report contextualises the

broad retail and wholesale sector’s performance at present and in the recent past. This

involved drawing out Cebr’s analysis of the retail sector and reviewing the specific types of

businesses that are appearing more likely to fail given the broad economic environment for

retail. We also delve deeper into the retail sector, reviewing the recent sales volumes

performance of food stores, household goods stores and clothing and footwear stores.

We use this to then discuss the sector’s business failures, sales volumes and retail business

unit vacancies. These are vacancies that could, in theory, be occupied by betting shops and,

given the retail environment on the high street, the opportunity cost of doing so (in terms of

the benefits that could be expected from the vacancy’s next best use) could well be zero. This

lends further support to the case for not unduly restricting the opening of betting shops

through new planning regulations, the subject of the previous section.

5.1 Top-level view: the retail and wholesale sector

Retail and wholesale businesses have been under considerable strain since late-2008. Figure

12 illustrates how annual retail and wholesale business failures were up by 28 per cent

between 2007 and 2008, reaching a peak of approximately 3,700 in 2009. Since then, annual

failures have come down, but the economic environment is still challenging. Failures

climbed between 2010 and 2011 and are projected to peak in 2012 when failures are expected

to be 11 per cent higher than in 2010.

Figure 12: Retail and wholesale annual business failures

Source: BDO “Industry Watch”, Q1 2012

Notes: Figures for 2012 and after are projections from Cebr’s BDO “Industry Watch” Q1 2012

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

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Figure 13 shows year-on-year growth in retail sales which, before 2008, was comparatively

strong, but has suffered since the recession, recording a volumes decline of 0.3 per cent in

2010. Going forward, the situation is expected to improve modestly. Figure 13 captures our

expectation that volume growth will gradually increase, reaching 2.3 per cent in 2013. This

still compares poorly with pre-recession growth, which averaged 3.1 per cent in the period

2001-2005.

Figure 13: Year-on-year percentage change in retail sales volumes

Source: Office for National Statistics

Notes: Figures for 2012 and after are projections from Cebr’s Databank

Comparing Figure 12 and Figure 13 suggests that the slump in retail sales in the period 2008-

2009 took heaviest toll in terms of failing businesses. Business failures have stabilised

somewhat in 2010, at least to levels that are closer to pre-recession levels. This is despite the

continued drop in retail sales volumes in 2009 and 2010.

Figure 14 illustrates the percentage of vacancies among retail units. This has fallen

consistently since 2010 but is still well above pre-recession levels. There was a decline in

vacancies between 2011 and 2012, from 13.7 to 12.7 per cent.29 But looking forward, retail

vacancies are still expected to remain between 2.5 to 3.0 per cent above their 2007 pre-

recession level until at least 2014 or 2015.

29 These are the most timely data available in the public domain and were sourced from the Winter 2011/12 Colliers National Retail Barometer.

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

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Figure 14: Annual percentage of retail units which are vacant

Source: Winter 2011/12 Colliers National Retail Barometer

Notes: Figures for 2012 and after are Cebr’s in-house projections

There should be little surprise in the fact that Figure 12 and Figure 14 tell broadly similar

stories. Over the 2007 to 2015 period, retail and wholesale annual business failures and the

annual percentage of retail units which are vacant move in step. This is, perhaps, with

somewhat of a lag, in which case the fact that vacancy rates remained elevated in 2010

despite the fall in the number of business failures is most likely explained by consolidation

by businesses that have managed to survive.

5.2 Looking deeper: food, household goods and clothing & footwear

stores

Within the retail sector, there is a diverse range of experiences following the recent

recession. Food stores suffered more severely that the retail sector as a whole in 2010. While

retail sales volumes declined by 0.3 per cent, food store volumes declined by 1.5 per cent

and, even as annual retail sales returned to positive growth in 2011, food store sales volumes

declined by 1 per cent.

Pre-recession, household goods stores consistently outperformed the retail sector as a whole.

But in each year of the period 2008-2011, they experienced significant annual declines – of

4.4 per cent in 2010, by even more in 2009 and by 3.4 per cent in 2011.

Clothing and footwear stores, on the other hand, have outperformed the retail sector as a

whole since 2007. Even as annual retail sales volumes declined by 0.3 per cent in 2010,

clothing and footwear sales volumes grew by 7 per cent.

0

2

4

6

8

10

12

14

16

2007 2008 2009 2010 2011 2012 2013 2014 2015

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In conclusion to this section, food stores sales volumes underperformed the retail sector

before 2012, catching up rapidly thereafter. Food stores and general retailers are expected to

be on a rough par for the 2013 to 2015 period. In terms of sales volumes, household goods

stores underperformed versus retailers in general from 2007 to 2011. Looking forward, this

trend is expected to continue. The opposite is true of clothing and footwear stores.

This snapshot of three types of retailer shows the diversity of experiences within the retail

sector, as well as showing the specific types of businesses that are appearing more likely to

fail given the broad economic environment for retail.

5.3 Economic implications of denying the use of vacancies by betting

shops

To conclude this section, we note again that the UK economy has been under considerable

pressure since late 2008. Cebr’s sectoral model of the UK economy predicts that many types

of retailer will continue to suffer in 2012 and 2013 before only gradually recovering. We have

drawn on Cebr’s Industry Watch analysis in which, in conjunction with BDO LLP, we

predict business failures by broad industry sector over the coming 18 to 24 months.

This reveals that the steep declines in retail sales in the period 2008-2009 took their heaviest

toll in terms of failing businesses in those years. Business failures have stabilised somewhat

in 2010, at least to levels that are closer to pre-recession levels even though retail sales

volumes have continued to fall.

Retail unit vacancies also grew rapidly in the 2008-2009 period and, despite a fall in business

failures, vacancies in 2010 remained elevated at their 2009 level, suggesting that those

businesses that did survive were in consolidation mode. While retail unit vacancies have

fallen consistently since 2010, they are still well above pre-recession levels and are expected

to remain between 2.5 and 3.0 per cent above their 2007 level until at least 2014 or 2015.

These are vacancies that could, in theory, be occupied by betting shops and, given the

retail environment on the high street, the opportunity cost of doing so (in terms of the

benefits that could be expected from the vacancy’s next best use) could well be zero.

Arguably, this lends further support to the case for not unduly restricting the opening of

betting shops through new planning regulations. Such undue restriction would result in the

UK and its constituent economies foregoing the economic benefits of more betting shops –

outlined above and more extensively in the main report – despite there being little else to

occupy High Street vacancies given the tough environment facing the retail sector in

general.

Furthermore, with vacancies remaining elevated with little sign of a strong recovery anytime

soon, and local authorities already struggling financially with the depressed economy (and

consequent commercial lot vacancies) and with fiscal cuts, failing to fill these vacancies

with betting shops when there is no viable alternative use, could deprive local

Government of a potential source of increased revenues from business rates.

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In 2010, business rates from betting shops provided UK Local Government with revenues of

over £58 million, an amount which could be increased to plug budgetary gaps left by fiscal

cuts if the opening of new betting shops is not unduly restricted. In the event that such

openings do become unduly restricted, the current economic environment facing much of

the retail sector and the fact that vacancies are expected to remain elevated for the

foreseeable future means that there are likely to be few other opportunities for local

authorities to plug these gaps.

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Annex I: Questionnaire underlying in-depth interviews with

the major bookmakers

What follows is the questionnaire used as the basis for our primary research with the

bookmakers. For each question, we requested separate answers for the UK as a whole, of

which:

Wales East Midlands

Scotland West Midlands

N. Ireland East of England

England of which London

North East South East

North West South West

Yorkshire & The

Humber

The questionnaire

Proposed new planning regulations pertaining to betting shops may be introduced in the near future.

These may affect betting shop companies’ ability to expand the floor space of their existing shops

and/or to open new betting shops.30 The effects of these new regulations may vary by UK region.

These new regulations may induce knock-on reductions in employment in betting shops, investment

by betting shop companies, betting shops’ output, profit and contribution to the economy and the

Exchequer.

We would like to enquire as to how the introduction of new planning regulations might affect your

company’s betting shops in terms of their impact on about 10 variables relating to these betting shops,

namely their number, floor space, employment (incl. a breakdown between 18-24 year-olds, females

and the disabled), investment, output, profits and business rate payments.

The questionnaire we have developed below is intended as a guide to the information that would be

most useful for our purposes.31 However, we do not wish it to unnecessarily restrict our conversation,

30 New planning regulations, the initial consultation for which is scheduled to begin in April 2012, may be implemented which will reclassify Licensed Betting Offices from the A2 Use Class (financial and professional services) into another Use Class which is specific to betting shops. Under current regulations, betting shop companies may institute new betting shops in vacant properties or lots which were formally used by other businesses falling under the A2 use class. Such moves do not currently require planning permission. The Use Class reclassification, if it occurs, could mean betting shop companies need planning permission each time they seek to open a new betting shop. This could inhibit betting shop companies’ ability to expand.

31 The purpose of the part of our study to which this interview pertains is to establish the loss to local economies of denied planning permissions for betting shops, in terms of investment and output, jobs and business rates foregone. Because betting shops tend to provide significant proportions of part-time jobs and employ high percentages of 18-24 year-olds, females and the disabled, we are also interested in jobs foregone in this context.

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particularly where detail not captured by the questionnaire would help contextualise our results. We

would appreciate receiving as many years’ data as possible.

QUESTIONS ABOUT YOUR COMPANY

Please direct us to publicly available sources where possible.

1. At the end of 2011, how many betting shops did your company have?

2. At the end of 2011, what was the average floor space occupied by each of your

company’s betting shops?

3. At the end of 2011, how many people did each of your company’s betting shops

employ, on average?

4. At the end of 2011, how many people in the 18-24-years-old age bracket did each of

your company’s betting shops employ, on average?

5. At the end of 2011, how many women did each of your company’s betting shops

employ, on average?

6. At the end of 2011, how many persons with physical and/or mental disabilities did each

of your company’s betting shops employ, on average?

7. In recent years, how much money has been required to open a betting shop, particularly

in terms of re-fitting and equipping the shop with appropriate machines and

technologies?32

8. In 2011, how much, on average, did each of your company’s betting shops pay in

business rates?

9. In 2011, how much output (turnover), on average, did each of your company’s betting

shops produce in:

10. In 2011, how much gross profit (after tax if possible), on average, did each of your

company’s betting shops attain?

QUESTIONS ABOUT THE IMPACT OF POTENTIAL NEW PLANNING

REGULATIONS ON YOUR COMPANY

These questions pertain to the expected effects of potential future regulatory changes which re-classify

betting shops into their own specific Use Class, removing them from the A2 Use Class. We appreciate

that quantifying the effects of potential future regulatory changes on betting shops’ future outcomes

may be challenging. Please give what you consider to be the most likely estimates of these effects on

your company. Furthermore, please direct us to publicly available sources where possible.

32 Further examples of investment include: advertising expenditure, staff training, front-of-shop displays etc.

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11. If the new planning regulations are in force by the end of 2012, at the end of 2014, how

many fewer new betting shops would your company expect to have relative to the

situation in which the new regulations had not come into force?

12. (Alternatively phrased, this question seeks to establish your company’s current plans

for expansion in the number of betting shops and what the impact on that plan might be

should the changes in the planning system described above be implemented.)

13. What are your current plans for the expansion of the floor space of existing betting

shops? What would be the impact on these plans if the changes to the planning regime

discussed above were implemented?


many fewer new people would your company’s betting shops be likely to employ

relative to the situation in which the new regulations had not come into force?


many fewer new people in the 18-24-years-old age bracket would your company’s

betting shops be likely to employ relative to the situation in which the new regulations

had not come into force?


many fewer new women would your company’s betting shops be likely to employ



many fewer new persons with physical and/or mental disabilities would your

company’s betting shops be likely to employ relative to the situation in which the new

regulations had not come into force?


much less money would your company’s betting shops be likely to have invested


CEBR - The contribution of betting shops to the UK economy

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