The maximum stake on ‘crack cocaine’ gambling machines will be slashed from £100 to £2.
The Government said the move will cut the risk of potentially large financial losses from controversial fixed odds betting terminals (FOBTs).
The long-awaited decision follows months of Whitehall wrangling and a sustained lobbying campaign by bookmaking firms which make a fortune from FOBTs and claimed cutting the stake to £2 could lose the Treasury £1.1billion over three years.
The decision goes further than the recommendations of a review carried out by the gambling regulator earlier this year, which recommended the maximum stake for FOBTs should be set at or below £30.
The amount people can stake on fixed-odds betting terminals (FOBTs) will be slashed to £2 to reduce the risk of `gambling-related harm´, the Government has announced (Daniel Hambury/PA)
Culture Secretary Matt Hancock said: ‘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.’
The decision is set to please campaigners but will come as a blow to bookmakers, which have warned it would cost betting shop jobs across the country.
Brian Chappell of Justice for Punters said: ‘This is fantastic news. Betting shops will now be a much safer environment for customers and staff.’
Currently gamblers can bet, and lose, £100 every 20 seconds meaning potentially thousands of pounds in a single session.
Since Labour’s 2005 Gambling Act the number of FOBTs – which offer casino-style games such as roulette – has increased from 20,000 to nearly 35,000.
Since Labour’s 2005 Gambling Act the number of FOBTs – which offer casino-style games such as roulette – has increased from 20,000 to nearly 35,000 (stock image)
Each generates an average of £50,000 a year for bookmakers.
But the machines are blamed for addiction, crime, debt, violence and family breakdown and their users are concentrated in some of the poorest communities.
Ministers are understood to have concluded that a £2 stake is needed to protect vulnerable gamblers.
Evidence compiled by culture minister Tracey Crouch found high rates of problem gambling by FOBT users.
When the Government launched policy proposals on FOBTs last year it was feared the stake could be kept as high as £30. But the shift to £2 was backed by council leaders, church groups, charities, gambling campaigners and MPs from across the political spectrum.
The decision will require a vote by MPs but should sail through Parliament.