The gambling industry once again hits the headlines following new reports that the government might slash the maximum stake on fixed odds betting terminals (FOBT) to just £2.

This story has run and run but it is having a massive impact on bookmaker stocks in early trade on Tuesday, with shares in William Hill plunging 11% on the news to 300.5p, valuing the bookie at £2.56bn.

William Hill shares have run up strongly in recent months from levels below the 250p per share arm in October.

The reports are putting the squeeze to other quoted gambling stocks, with Paddy Power Betfair, the UK’s biggest quoted gaming firm, heading the FTSE 100 loser board on Tuesday, its stock off nearly 3% at £71.20.

Shares in GVC, which owns Ladbrokes Coral, are down around 4.5% at 927p.