Strict rules which prevent the spread of casinos and high-stake gambling machines should be relaxed, MPs have said.
Local councils should be allowed to permit betting shops to operate more than four high-stake gambling machines, which can accept stakes of up to £100 and offer prizes of £500, the Commons Culture, Media and Sport Select Committee said.
Casinos should be allowed up to 20 of the machines, the MPs claimed, adding operators across the sector should be charged lower fees by the industry regulator, the Gambling Commission.
The recommendations are likely to anger anti-gambling campaigners, who believe there is too much temptation on the high street for those with addictions.
But one source close to the MPs described the most recent legislation, the Gambling Act 2005, as "puritanical", adding it was now time to relax the rules governing the industry.
Ironically, the 2005 Act originally set out to allow the introduction of Las Vegas-style super-casinos across the country, with fruit machines offering unlimited payouts. However, the plans, proposed by then culture secretary Tessa Jowell, were watered down significantly in the face of fierce public opposition, with super-casinos cast aside and the creation of the Gambling Commission to regulate the industry.
MPs said the commission was too bureaucratic and expensive, adding it was not for Whitehall to decide on the location of casinos in the UK but local councils instead.
"Gambling is now widely accepted in the UK as a legitimate entertainment activity," said John Whittingdale, Tory chairman of the committee. "The 'reluctantly permissive' tone of gambling legislation over the last 50 years now looks outdated."
Asked whether he expected any opposition to the idea of relaxing the restrictions on casinos, Mr Whittingdale said that in 2005 those who were against the legislation did not want to see the introduction of super-casinos.
Today, there was "little enthusiasm" within the industry for such large-scale gambling venues, but power to choose where a smaller casino could be located should not rest with central government, he said.