Bookies saw shares plunge on Monday after it was reported that a review will cut the level of the maximum stake on fixed-odds betting terminals (FOBTs) to £2.
William Hill tumbled by 11.7% and Ladbrokes Coral was 8% lower by the close of trading – wiping £577m from their market values collectively – after a report in the Sunday Times, attributed to an ally of new Culture Secretary Matt Hancock.
But the claim was dismissed as the latest “rumour and speculation” by Ladbrokes chief executive Jim Mullen.
A widespread fixture in high street betting shops, FOBTs have been described as the “crack cocaine of gambling”.
They currently allow punters to spend £100 per 20-second spin.
A long-awaited review published last October recommended that this should be cut to £2, £20, £30 or £50 depending on the outcome of a consultation due to end this week.
Cutting the stake to £2 could result in a sharp reduction in revenues earned on the terminals.
Image: Ladbrokes is being taken over by GVC
Responding to the latest report, Mr Mullen said: “We are very clear that stake cuts will fail to adequately address any issue of problem gambling.
“The industry has also always made it clear that a cut to stakes will have serious consequences – resulting in shop closures which will ultimately affect jobs, tax revenue and the funding of racing.”
There are an estimated 34,000 FOBTs around the country.
Ladbrokes Coral, Britain’s largest bookmaker, has more than 3,500 betting shops employing over 25,000 people.
William Hill has about 2,400, employing more than 12,500.
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Ladbrokes, which is in the process of being taken over by Foxy Bingo owner GVC, earned about £800m of revenue from gaming machines in 2016.
The takeover deal values Ladbrokes Coral at £3.1bn to £3.9bn, with the final price depending on the outcome of the gaming machines review. GVC shares were down 1.2% in Monday trading.