What if gambling shops are a low margin business?

This does sound terrible, doesn’t it?

The UK’s most deprived areas have more than 10 times the number of betting shops than the most affluent parts of the country, research shows.

Gambling venues are concentrated in the most deprived areas of Britain, against the wishes of people who live nearby, according to a report commissioned by the Standard Life Foundation charity. “Those with the least resources are being targeted more,” the report says.

Analysis of the geography of bookmakers, amusement arcades and bingo halls by academics at the University of Bristol found there are more than 10,000 gambling venues in Britain, higher than the number of supermarket sites.

Of those gambling outlets, 21% of them were in the most deprived decile of areas in Britain, while 2% were in the wealthiest. For comparison, 10% of supermarket chains’ stores were in the poorest areas, while 7% were in the most well off.

This is similar to the oft quoted finding that fast food takeaways are mostly in the cheap part of town. That very sentence there telling us what could be the cause. For fast food takeaways are not known as vastly high margin businesses. Therefore they will - likely - be where rents are cheap and thus in the cheap part of town.

Now we don’t know whether this is true of gambling shops but we’d expect it to be true. Certainly, we’d expect a report looking at the issue to at least consider the point even if only to be able to rule it out.

For example, it can be cheaper for businesses to set up in deprived areas where the rents may be lower

Sadly, that’s as far as they go. Detailed consideration of the point doesn’t then follow. We’d thus pay this report no mind. Simply because they’ve not made enough effort to rule out simple economic incentives to explain the observed behaviour.