The UK government on Thursday cut the maximum stake on fixed-odds betting terminals (FOBTs) from £100 to £2 in a move that delighted anti-gambling campaigners and brought a mixed reaction from the industry.
"The government wants to reduce the potential for large losses on FOBT machines and the risk of harm to both the player and wider communities," said Sports Minister Tracy Crouch.
"Following analysis of consultation responses and advice from the Gambling Commission, the government believes that a cut to £2 will best achieve this."
Bookmakers warned the limit could lead to thousands of outlets closing, although the investors seemed to take this doomsday warning with a large pinch of sale as shares
in all the major firms rose. The reality is that most will benefit from the lifting of a ban on sports betting in the US announced earlier this week.
Government revenues will also be reduced by the measure, but this is meant to be offset by a proposed rise in online gambling.
Ladbrokes Coral owner GVC said the planned new £2 maximum stake on gaming machines would cost it £160m, but said it would not challenge the government's decision in court.
William Hill said operating profits would be hit by up to £100m and gaming revenue reduced by 35-45%.
"We estimate that the direct, pre-mitigation, impact of this new stake limit would be a 33% to 43% decrease in our total machine gaming revenue. In 2017, this would have equated to a £35m to £46m revenue impact, representing 2% - 2.6% of group revenue."
It also warned that the stake limit could result in around 900 William Hill shops - or 38% of its chain - becoming loss-making.
Paddy Power Betfair said gaming revenues would be cut by £35m-£46m, although it welcomed the change.
Paddy Power chief executive Peter Jackson said the bookmaker had "highlighted our concern that the wider gambling industry has suffered reputational damage as a result of the widespread unease over stake limits on gaming machines".
"We welcome, therefore, the significant intervention by the government today, and believe this is a positive development for the long-term sustainability of the industry."
Currently, people can bet up to £100 every 20 seconds on electronic casino games such as roulette. The machines raked in £1.8bn in the year to March 17, according to figures from the gambling commission.
Culture Secretary Matt Hancock said there was no set timetable for the introduction of the cut, adding that the government would work with the industry to implement the change. The move requires parliamentary approval.
"When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand. These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all," he said in a statement.
Labour MP Carolyn Harris, who leads an all-party group that campaigned for the change, said FOBTs had caused "so much social harm and huge losses for those who can least afford it".
"Last year there were more than 230,000 individual sessions in which a user lost more than £1,000. These machines have increased the risk of problem gambling which carries a huge social and economic cost."
"This was morally the right decision to make and it is victory for all those people whose lives have for far too long been blighted by these toxic machines."
The Association of British Bookmakers said it expected more than 4,000 shops to close with 21,000 job losses.
"The independent expert advice warned that this would simply shift people, the majority of whom gamble responsibly, to alternative forms of gambling where there is less chance of human interaction and its impact on problem gambling levels is far from certain," the group said in a statement.
"As the industry adjusts its business model, those shops that do survive will continue to provide a safe place to gamble with staff interaction and industry leading responsible gambling measures and support British sport."