Gambling Bill disappoints the City

Strict new limits on the number of big jackpot slot machines, particularly for smaller casinos, stood in contrast to the liberalisation the City had anticipated. A threat of further stringent regulation also weighed on traders’ minds.

Stanley Leisure - the UK’s biggest casinos operator - and rival Rank Group both saw their shares slide more than 6 per cent. Bookmakers also took a hit, with William Hill continuing a recent run of poor form sparked by chief executive David Harding’s sale of 5.5 million-worth of shares last week.

The government’s tougher stance - which will also lead to the removal of fruit machines from around 6,000 chip shops and taxi offices - follows concerns that loosening betting rules could spark an increase in gambling addiction.

Culture minister Tessa Jowell said: "Britain has one of the lowest rates of problem gambling in the modern world. This is at risk if we do not act now and bring our laws up to date.

"We only propose giving adults additional consumer choice where we can also protect children and vulnerable players."

She added that the first task of a new regulator for the industry, the Gambling Commission, will be to investigate the extent of gambling addiction in the UK, warning that "if the evidence tells us that we need to be tougher to protect the public, then we will be".

Stanley Leisure saw its shares slide 30.5p to 448p - wiping about 35m from its market capitalisation. Rank was down 18.75p at 286.25p, while London Clubs International - an operator of larger casinos - slid 0.6 per cent to 127.5p.

Although there were no specific concerns for bookmakers raised by Jowell’s comments, William Hill closed 3.2 per cent down at 522p. Hilton Group, whose Ladbrokes chain has been offsetting tougher times in its hotels division in recent years, was also in the red, closing 1.5 per cent off at 261.5p.

The plans will see unlimited jackpot Las Vegas-style fruit machines restricted to large casinos - hitting the smaller casinos run by Stanley and Rank.

Smaller casinos are also to be barred from offering bingo.

Andrew Lee, betting analyst at Dresdner Kleinwort Wasserstein said: "I don’t see anything like the upside that has been priced into the sector in anticipation of this bill. These are all politically motivated changes that have been introduced and it all amounts to a dilution of what we were expecting. It’s not very liberal at all."

Another analyst said: "This looks a lot harsher than we were expecting. The only good thing seems to be that at least the legislation looks like it will be pushed through quickly."