Half a billion pounds has been wiped off the value of Ladbrokes and William Hill after the bookies were hit with a surprise hike in gaming machine duty.
Traders sent shares tumbling for a second day as Hill admitted the impact of the Budget changes would be even worse than it initially calculated.
The FTSE 100-listed group had estimated yesterday that the increase in the tax on fixed odds betting terminals from 20% to 25% would cost it £16 million over a year but today issued a new statement increasing the figure to £22 million.
This was after clarification that the tax hike would apply to revenues from lower-stake machines such as fruit machines as well as the fixed-odds betting terminals that have been dubbed the "crack cocaine of gambling".
Shares fell 7% in the wake of the Budget announcement and were off a further 3% today. It leaves the market value of the company more than £300 million lower than it was at the close of trading the day before the Chancellor's speech.
Ladbrokes shares had lost 12% yesterday and were also down again today, by 5%, meaning its worth has fallen by more than £200 million.
"The news is a surprise and a clear negative for both stocks," he said.
The Association of British Bookmakers described the new rate on fixed-odd betting terminals as a "knee jerk and ill-considered tax raid".
It said: "The licensed bookmaking industry is the only sector in the UK that pays more in tax than it generates in profits.
"The Government's desire to continue to soak the industry undermines our ability to continue to support horse and greyhound racing.
"It will cost jobs and reduce the investment we can make in the research, education and training that's needed to tackle problem gambling."
William Hill saw revenues from fixed-odds betting machines rise by a fifth in 2013 as it grew the number it had to 9,400 over the year.
But there have been increasing calls for the use of the machines to be banned or limited.
The Budget raid on gaming machines is in contrast to the Chancellor's stance on bingo duty, which will be halved to 10% - providing a shares boost yesterday to Mecca Bingo owner Rank.