Betting Shop Valuation

I regret to say that as an outside investor I would value such a shop at zero. This is based on the fact that such a shop, even with two full time staff single manning the unit covering each other holidays to full opening hours, will struggle to have running exes lower than 2500 per week.

As such, it will not make a profit. In addition, independents are in decline, so I can only see the situation becoming worse. I would not accept such a such given lease and SIS contract requirements, if you offered it to me for nothing.

Such a unit might have a value to somebody prepared to run the unit themselves, at least part of the time, to reduce the staffing expenses. But they would do well to extract more than 30k a year from such a project.

If you are considering buying such a business as above, i would urge you to reconsider. If you are the vendor, very best of luck in the current environment. I fear you will need it.

Thank you for your reply howisurluck. Your comments were very informative and you certainly know what you are talking about.I have a chance to take over a unit for probably nothing and have been toying with the idea for sometime.As you have mentioned the pros and cons so well i was wondering if things didn't go as expected what sort of price could i sell it on for.

Thanks for comments again...regards

Im The Man;
turn over 750k profit 15% making £113k. Fob profit £41k giving you £154k to play with.
Expenses;
SIS 19000
TURF 8000
COUPONS SLIPS 5000
GAMB COMM 1800
LICENCE 600
RENT 13000
RATES 3000
INSURANCE 600
LEVY 1000
FOB SHARE/RENT 8500
EPOS 4000
GAS/ELECTRIC/WATER 6000
BITS N BOBS 5000
BETTING TAX 23000 (INCL FOBS WHICH WILL COME SOON)
MAKING 115K
leaving you a profit of £39000.

Assuming you run it yourself (impossible but lets say you do) open at 9.30 till 9.30 7 days = 84 hours.

£39000 profit makes £750 per week at 84 hours means your earning £8.90 an hour and wont see daylight.

The form filling never ends, the gamb comm will talk to you like you are supplying heroin at the school gates, every night when its dark your waiting to be shot at/knifed/attacked .
The business will not get any busier it will only dwindle.

If you can get it for nowt and not tied in to any long rents, your only hope would be to get a few mugs on the phone (they are still out there) and just keep that under the counter.
You will find you can make an awfull more that way than the other way.

You will be taking over a business that turns well over a million pounds, gives you a constant headache, and makes you buttons.

OR

you could sit in the corner of a busy boozer/workin mens on a Sat or busy festval days and your expenses will be a pint and a pen and all you win is yours,

Taking on this shop will onlyline the pockets of everybody but yourself.

Oh I forgot another expense NEWSPAPERS £1600

Good Luck Either Way.

LOL superb reply maineroad.. am looking at my piece of paper and you are spot on....20 years working as a betting shop manager mainly for independents pumping out profits for them...thinking of a last bit of glory for myself but deep down know that the games up....gawd bless betfair my only expense is the 20% premium charge.

Your other problem is that if it really is any good one of the majors will simply open next to you in the end and undercut you until you are put out of business.

Based on the info provided I wouldn't take it for nothing.

The potential downsides are far worse than the potental upsides.

i think you missed your accountants fees,machine duty and i am sure your first application to the gambling comission is in the region of 5k and if you are silly enough to pay it a fee to football data co.

years ago if you had done your tank you could always knock the shop out as the shop licence was an asset but since the removal of that and the overheads i am sorry to say that if someone is offering you a shop they should also bung you 50k to take it off there hands as no matter how good your bookmaking skills you will iron out that the first year.

the only way you will survive with a shop is if your money laundering and charging approx 5% and nowdays they seem to be happier channeling that money through costcutter/convienince stores.

in london i do not think there is hardly an independent left with the likes of bloxhams,max thomas,thames bookmakers,oddsit,taylor racing,bruces,collins,campbells,john nelson and john power of walthamstow dogs has even given up the shops and these were guys who had all been in the game since the 60s and in the last 3 years have not sold there shops but closed them down so that should tell you something if they cant make it pay.

sorry for the negative response but you would be better off buying a hot dog stand or ice cream van

Interesting thread, great replies! I would have thought the turnover would be more, it doesn't seem like much but I'm only guessing, just surprised how low it is.

Is there any money in casino arcades these days? One opened last year near me, had lots of machines, but closed after about 6 months. There's another near me that has the 500 quid machines and has just started opening 24 hrs, though there's only a couple of punters in there at night. I would guess there's still money to be made in this type of outfit?

Im the Man - I wouldnt be totally put off by some of the above replies - although all have very salient points within them

On the positive sides

- can you look to run it with someone with an existing Op licence - this would save a massive headache and save significant costs

- does the premesis have enough space to convert part to a Trading Room?

- is there scope to increase the T/O with potential new customers

- will all of the internal equipment be included in the sale

You must also consider what part of the current T/O is telephone/credit - this must be deducted from your business plan (you will be able to build this, but from a zero start)

Also, look at the trends - if T/O & GP is falling (as in most indies) and costs rising, then I'm pretty sure it will continue to fall for the next few years, but probably at a faster rate.

Is it a freehold or leasehold property

It will costs a minimum of £8K per month to run and thats if you are 85% 'hands on'

The initial info you gave is insufficient to give an evaluation of this betting shop, but I hope the above helps you to come to the right conclusions

Im The Man

The sad thing for the fella who has it now is that 8 years ago it was probably worth £300k

Also to consider

An ageing customer base with probably limited new (young) customers, internet and ipad apps etc. will all shrink future t/o, unless you have some way of improvising in new business

I currently take well less than your figs - but survive by improvising in other income streams. and running it solely on my own. However, as all my supplier contracts end in 2014 - I cannot see my shop surviving beyond this and will not be renewing any licence/lease/contracts beyond Jun 2014. Even if its still profitable, it will be worth zilch.

So, on reflection, I'd be very wary in investing in this business at this time

take the chance and just take sis audio and put in a couple of dodgy sky boxes and show atr and racing uk.

a couple of tvs with text results and betting and you have saved yourself neigh on 30k a year but i dont know how long you will get away with it until some one bubbles you and to be truthfull i dont even think you need the sis audio for what you take on the dogs nowdays

credit betting will be no good now as all you will get is live money and knockers as i am sure you are aware even the big firms are not interested in that side as debit/internet is there way now.

there was a trading/betting shop in highgate called elite i would ring him up and ask for a bit of advice before you think of going down that route but if thats what you want to do good luck and i wish you all the best

ITMAN

if maine and birch cant make it pay

GIVE IT A SWERVE


dont think SIs offer audio only now minimum contract 15k 2 years
sad but busines desd fr the indy

From Feb. even your fobt profit will diminish;

http://www.hm-treasury.gov.uk/consult_machine_games_duty.htm

http://www.telegraph.co.uk/finance/budget/9158889/Budget-2012-New-gaming-machines-tax-puts-11000-jobs-at-risk.html

Why is the industry worried.  The 11,000 that lose their jobs will then just put the money into the machines from their JSA.