Plans to allow Las Vegas-style casinos in every UK city could lead to a surge in problem gambling, a committee of MPs and Lords has warned.
The Gambling Bill will liberalise casino laws
The joint committee on the draft gambling bill said the government's plans should be toned down.
In a 300 page report, it says large "resort" casinos should only be built in areas of high unemployment.
And there should be a strict limit on the number of big prize slot machines allowed on the casino floor.
The report recommends an upper limit of 1,250 machines, compared to the current limit of 10.
The cross-party committee, made up of peers and MPs said there was no reason why the government's Gambling Bill should not be introduced in the current Parliamentary session.
But it recommended a series of measures to control any increase in gambling problems resulting from the Bill.
"We would expect the draft Bill to lead to an increase in the prevalence of problem gambling, even if only as a result of an increase in the numbers of those who gamble," the report says.
Committee chairman, Tory MP John Greenway, said the government had to go into gambling reform "with its eyes open".
"We do not believe that it is acceptable that casinos, once they reach a certain size, should be entitled to have as many high value slot machines as they want.
"We do not believe that fruit machines should be in fish and chip shops and taxi offices.
"We take the view that different parts of government, including the Department of Health, must work together to form a proper strategy to address this public health issue, and that both the government and the industry should foot the bill."
The government, which is not bound by the report's findings, wants to increase the number of casinos to boost leisure employment.
Culture secretary Tessa Jowell said she would consider the findings "very carefully" and added she was "keen to bring the Bill back before parliament as we can".
The committee acknowledged that reform of the law on gambling was "long overdue", and that the proposed legislation was "necessary and urgent" to prevent a sharp increase in "gambling of doubtful legality".
It calls for the setting up of an industry-funded trust providing research, education and treatment for problem gamblers as a "crucial counterbalance" to the Bill's deregulatory aspects.
The report also recommends:
- Banning smoking at gaming tables and fruit machines, partly to encourage gamblers to take a break
- Allowing drinks to be served at tables
- Banning advertising that can be seen by under-18s
The committee said large-scale resort casinos - which include hotels, restaurants and entertainment complexes - should be required to include "regeneration benefits" in their plans in order to secure a licence.
Such benefits could include improved transport arrangements, restoration of historic buildings, the use of derelict sites and the provision of new job opportunities.
This could mean resort casinos being restricted to run-down seaside towns, or places with relatively high unemployment, such as Blackpool.
Roy Fisher, leader of Blackpool Borough Council, said: "We are very pleased that the committee has recognised the importance of controlling the siting of the larger, resort-style casinos to ensure that they deliver regeneration benefits to areas most in need.
"Resort casinos are a vital part of our plans to create a prosperous, long-term future for the town - and they are an ideal ingredient for the revitalised Blackpool experience."
Nick Harding, a director of the RAL group, the UK's biggest operator of adult gaming centres, said he thought proposals to limit the number of slot machines - which contribute the lion's share of casino profits - might deter big US operators from investing in the UK.
The Salvation Army, which is campaigning against more gambling, said the report directly contradicted Culture Secretary Tessa Jowell's statement to the committee that the Bill would not lead to an increase in problem gambling.
Public affairs officer Jonathan Lomax, said: "We are not surprised that the committee has accepted that problem gambling will rise as a result of some of the measures included in the draft Bill.
"We are disappointed, however, that this is seen as an acceptable price to pay for more gambling opportunities, especially given the lack of public demand for them."