Shares in bookmakers William Hill and Ladbrokes Coral tumbled in early trading on Monday after weekend reports the UK government will cut the maximum bet on high stakes betting terminals to £2 — the lowest stake proposed.

William Hill was trading down 15 per cent at 286p a share and Ladbrokes down 12 per cent at 159.7p a share.

The crackdown on fixed odds betting terminals (FOBTs) is expected to hit revenues and profits at high street betting shops because the machines — which at the moment allow punters to gamble up to £100 every 20 seconds — are highly lucrative.

Under the consultation, which is due to close on Tuesday, the government is proposing to reduce the maximum stake to somewhere between £50 and £2.

In September, analysts at Barclays forecast that Ladbrokes Coral would lose £437m in annual revenue if the maximum stake on FOBTs was reduced to £2. William Hill would forego £288m, while Paddy Power Betfair would lose £60m.

But analysts at Investec said speculation on the final outcome may be “premature” given the consultation, which has been running for 12 weeks, has yet to close.

Alistair Ross of Investec said in a note:

Matthew Hancock, the new secretary of state, has only just been appointed (9 January), and we think it is unlikely that a final decision on FOBT staking limits has actually been made

Mr Ross added that Investec currently estimated retail operators were pricing in a FOBT limit of between £15 and £20.

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