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The new US anti-online gaming legislation is already beginning to bite. World Gaming, which was recently in takeover talks with Sportingbet, says it is in technical default of its loan conditions. Its shares are down 15 per cent. And PartyGaming has scrapped its maiden interim dividend. Stocks in the sector have extended yesterday’s catastrophic falls. PartyGaming shares, which fell 60 per cent yesterday, are off another 9 per cent this afternoon. 888 Holdings, which fell 25 per cent yesterday, is down almost another 5 per cent today. And Sportingbet shares, which gave up 65 per cent yesterday, have lost another 2 per cent.

All this is despite the predictions on our front page this morning that some of these companies could be bid for. The fact is that, for all the industry’s groping for silver linings, the old business model is a busted flush. 888’s chief executive, Gigi Levy, says he thinks his company can reinvent itself in the US as some sort of online entertainment company with new products such as fantasy sports games. Nigel Payne, chief executive of Sportingbet, even resorted to a rather pathetic appeal for government and EU support on Radio 4’s Today programme. If you missed him at 6.15am, you can listen to him again through the programme’s website. What do you think: should online gambling be banned? Join our online forum.

Tesco‘s Sir Terry Leahy will be trying to persuade the world today that all the growth prospects are abroad and he is smaller than he looks at home, after producing stronger than expected first half results.

The figures were boosted heavily by higher prices, although like-for-like sales were also up. There was strong growth at Tesco.com. Tesco’s shares were unmoved this morning. The results bode well for other retailers such as Marks and Spencer and Sainsbury’s.

Xstrata’s £2.9bn rights issue, announced this morning, is London’s second largest ever, behind BT’s £6bn one in 2001, but is slightly smaller than expected. The other surprise is that the three-for-one issue is deeply discounted: the new shares are to be priced at £12.65, a 42.5 per cent discount to the closing price on Monday. The capital raised will help fund the group’s $16bn acquisition of Canada’s Falconbridge but one analyst quoted in our piece on FT.com says: “They are issuing more capital than they need to at a lower price than they need to.” The issue is fully underwritten by Deutsche Bank and JP Morgan.

National Grid says it anticipates strong first-half earnings thanks to lower financing costs, higher income and an effective tax rate in line with last year. Severn Trent, the UK water and waste management company, said it had increased its sales prices in the first half by nearly the maximum allowed by UK regulators.

Governance for Owners, the corporate governance firm set up by former Hermes directors Peter Butler and Steve Brown, has won backing from Calpers. The giant Californian public pension scheme, with $214bn (£110bn) of assets, has agreed to invest $200m (£107m) in its flagship European fund.

Rumour of the day: Shares in Manganese Bronze, the maker of black cabs, are up more than 8 per cent today on rumours of a Chinese joint venture or a bid from a Chinese manufacturer.

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