The value of London-listed gambling firms, including 888, Paddy Power Betfair and William Hill, surged by more than £1.5bn after the US supreme court struck down a nationwide ban on sports betting that has stood for 26 years.

The court upheld a legal challenge by the state of New Jersey, which argued that the Professional and Amateur Sport Protection Act of 1992 (PASPA) was unconstitutional.

The ruling, by seven votes to two, starts a race among British bookmakers and online gambling companies to win customers in the lucrative US market, with individual states now expected to draw up laws to allow sports betting.

Shares in online gambling firm 888, which operates a poker network in three US states, surged by more than any other company, gaining 15%.

The chief executive, Itai Frieberger, said the firm was “uniquely positioned to exploit the potential growth opportunities in the US market that today’s ruling opens up”.