Tom Watson 'delighted' with fixed-odds machine decision

The Labour deputy leader and shadow culture secretary said he was 'delighted' with the decision to reduce the top stake on the machines from £100 to £2, a move he described as 'a victory for cross-party campaigners'.

The Government's decision goes further than the recommendations of a review carried out by the gambling regulator earlier this year, which recommended the maximum stake for the machines – dubbed the 'crack cocaine' of gambling – should be set at or below £30.

West Bromwich East MP Mr Watson said: "This announcement signals the end of the reign of destruction and misery that FOBTs have brought on the lives of gambling addicts and their families and communities for too many years.

"It is a victory for cross-party campaigners who have worked tirelessly for this day over many years.

"This won’t be a silver bullet for the wider epidemic of problem gambling in the UK, but it will go a long way to solving what has been a particular evil for too long.

"It’s not often that the Opposition congratulates a Government minister, but [Sports Minister] Tracey Crouch has made the right decision."

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."

While the ruling has please campaigners it has come as a blow to bookmakers, which have warned it will cost betting shop jobs across the country.

Bookmaker William Hill branded the decision a 'tough challenge' and warned it could see around 900 of its betting shops become loss-making, with a 'proportion' at risk of closure after the new £2 limit comes into effect.

The group said the stake cut could also hit annual earnings by between £70 million and £100 million, given that it is estimated to reduce its total gaming net revenues by as much as 45 per cent.

The firm has already recently cautioned the stake cut could leave it at risk of a foreign takeover and jeopardise 20,000 British jobs.

Philip Bowcock, chief executive of William Hill, said: "The Government has handed us a tough challenge today and it will take some time for the full impact to be understood, for our business, the wider high street and key partners like horseracing.

"We will continue to evolve our retail business in order to adapt to this change and we will support our colleagues as best we can."

The Government has pledged to work with the gambling sector to ensure it has sufficient time to introduce the stake reduction and technological changes.