ntly merged Ladbrokes Coral saw its shares drop 9% on Monday after news broke that the operator’s discussions with online gambling group GVC Holdings had broken down.

Ladbrokes Coral shares had risen steadily on Friday amidst speculation a £3.2bn reverse takeover by GVC was being entertained.

Ladbrokes Coral’s stock fell in response to the news that the talks had ended.

While the merger would have been a surprise given both companies recent restructuring programmes but would have followed a trend of consolidation in response to the increased regulation and taxation that has affected industry operators over the past 12 months.

GVC acquired bwin.party in February 2016, Betfair merged with Paddy Power in the same month, and Coral merged with Ladbrokes in November 2016.

David Jennings, an analyst at Davy Research, commented to the Financial Times: “Consolidation is front and centre of everything in the gambling sector right now, and even early-stage talks are taken seriously by the market,

“What we saw today with Ladbrokes was the unwinding of expectations on Friday. With so much focus on incoming legislation, scale is important. They’ll do five months of heavy lifting to integrate, and then, after the regulatory review next year [at the end of March], you can start making a case for them becoming more active.”