GAMING stocks came a cropper after Government plans to deregulate the industry included fresh restrictions on casinos and slot machines.

New casinos must be a minimum 5,000 sq ft in size to stop small High Street gambling halls springing up that would be difficult to police.

Slot machines will be limited to three per gaming table in every casino except the very biggest. There are also proposed restrictions on linking machines in different casinos, limiting the chance to offer big jackpots.

Lisa Woodfin, analyst at RW Baird, said: ‘The market expected unlimited numbers of machines to be allowed, so its gut reaction to the restrictions has been poor.

‘It is seen as a blow to the midrange casinos, but it may not necessarily be a bad thing for the smaller ones, which can fit in only three machines per table anyway.’ Barry Hardy, chief executive of London Clubs, one of the major operators of big casinos, thought there would be a flurry of consolidation among smaller players.

Many will also be forced to find larger locations to install extra gaming machines. ‘Life will be much more difficult for smaller provincial casinos,’ Hardy added.

But it was good news for resorts such as Blackpool, where there is potential to build ‘super-casinos’.

Stanley Leisure, where rumours of a management buyout have been circulating, fell 6p to 3411/2p. London Clubs slipped 1/2p to 441/ 2p, while Rank, owner of Hard Rock restaurants, was flat at 287p.

The Footsie made some headway, but failed to breach the 4100 barrier, closingup 25.2 points at 4095.6. There was little reaction to the Bank of England’s widely predicted decision to leave interest rates unchanged at 3.5pc.

In early trading, Wall Street was up 40 points to 9102.8 on the back of stronger-than-expected July sales at some big retailers.

Sterling was trading at $1.61 and the euro was worth 70.54p and $1.138.

Dorchester-based pubs group Eldridge Pope frothed 11p higher to 1651/2p on a tender offer for 19.31pc at 165p by Michael Cannon, one of the City’s best-known leisure tycoons.

He already owns 10.68pc of Eldridge, having bought his stake since June 20 from five institutional investors at between 135p and 165p.

Now Cannon, which recently sold his Oxford-based pubs chain Morrells to Greene King for 57m, wants to lift his stake to 29.99pc, the maximum allowed before a full-blown bid. If he wants to gain control of Eldridge he must first win over the Pope family, who hold 32pc.

They have already seen Wolverhampton Dudley walk away from bid talks this year. They advised shareholders to ‘take no action’ for the time being.

Among blue chips, banking stocks led the way. Barclays was the biggest gainer, up 41p to 477p on first-half profits 12pc ahead. Bradford Bingley added 71/4p to 310p ahead of results today.

J Sainsbury continued to rise, up 71/2p to 281p, despite repeated denials that the blind trust that controls 35pc on behalf of the Sainsbury family will sell any shares. A sale could open the way for a bid.

British Gas owner Centrica was 21/2p dearer at 177p after broker SG Securities started research coverage advising clients to ‘buy’.

Hedge fund manager Man Group slipped 24p to 1177p despite chief executive Stanley Fink spending 468,000 on 40,000 at 1170p each, giving him 1.62pc.

Executive director Kevin Davis paid 117,000 for 10,000 shares at 1170p, giving him a total of 0.41pc.

Jitters over management changes were blamed for a 61/4p fall to 1731/2p at Brambles Industries. The finance director at its Chep USA distribution arm was replaced this week, only a year after the chief executive was removed.

Traders said a big seller was cleared out at Dowding Mills, the electrical and engineering services group that is trying to turn itself round. Shares rose 0.5p to 9.62p.