Officers were called to the Betfred bookmakers in Carolgate at 8.50pm on Friday.
It was reported that a man entered the store, threatened a staff member with a knife and demanded cash.
The suspect, who is white, aged 30 to 40 and was wearing a dark coat and a face covering, left with a quantity of cash.
The staff member was not hurt during the incident.
Detective Sergeant Dave Prest, from Nottinghamshire Police, said: "This would have been a terrifying experience for the staff member.
"A cordon remains in place and we are conducting a number of lines of inquiry to trace the man responsible,” he added.
Anyone with information should call Nottinghamshire Police on 101, quoting incident number 874 of January 10, or Crimestoppers anonymously on 0800 555 111.