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When the government introduced the Gambling Act in September 2007, it transformed the sector. While the increased freedom given to bookmakers in terms of shop location, opening hours, and the formalised status of fixed odds betting terminals (FOBTs), were seen as benefiting the industry, the increased licence costs were less welcome.

Gambling websites have created challenges for high-street betting shops, but FOBTs, which are highly lucrative, have boosted revenues. Shops can have up to four of these machines, which offer casino games such as roulette and jackpots of up to £500, on their premises. Industry figures suggest that in 2007, there were 28,000 machines across 8600 shops, and that the financial success of a shop has a lot to do with its ability to generate revenues through FOBTs.

The major high-street brands have expanded their operations to ensure they secure a cut of the online market. However, there remains a group of customers who either do not have internet access at home or are blocked from accessing gambling sites at work, meaning shops are their only option.

Despite the recession, spending in this sector is relatively robust compared with other leisure activities. More than £4bn was spent in betting shops in 2008, according to Mintel.

Betting is a relatively low-cost form of entertainment. The average stake in UK shops is about £8, while the most frequent bets are between £2 and £3, according to William Hill. About 2.2m adults visit betting shops regularly.

Eighty per cent of people who have visited a betting shop have placed a wager on a horse, according to Ipsos Mori research. There has, however, been a significant shift in what people bet on, away from greyhound and horse racing - turnover on the latter has halved over the past decade - in favour of sports such as football.

Concern had been raised that the abolition of the 'demand test' for betting-shop openings would lead to a rise in the number of shops on the high street, but this has not happened.

The major bookmakers have instead tended to relocate shops. Moreover, higher licensing costs have put pressure on independents, in particular, with many going out of business.

The three major bookmakers in the UK, William Hill, Ladbrokes and Coral, control two-thirds of the UK's 8800 betting shops. All three have been concentrating on modernising their branches to appeal to a broader audience rather than purely expanding their presence.

Betfred, which is based in the North West, remains the biggest independent with 735 shops. Its aim is to reach 1000 shops by 2013.

Betting shop visitors are predominantly male, with occasional in-store punters most likely to fall into the 35- to 54-year-old age group.

The UK's ageing demographic is not good for this market. Although older consumers tend to be more interested in racing than younger ones, the habit of visiting a shop falls in retirement.

Nonetheless, revenue should be boosted next year by the football World Cup.

Efforts to attract new audiences, make shops less daunting and placing a bet simpler would help this sector. Sports such as rugby and athletics have also yet to be fully exploited as areas of betting revenue.

By 2015, betting shop revenues are predicted to rise more than 15% to £4.7bn, according to Mintel, fuelled mainly by a growth in the income generated by FOBTs.