Strict rules preventing the spread of casinos and high-stake gambling machines should be eased, MPs say in a new report.
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 said, adding operators across the sector should be charged lower fees by the industry regulator, the Gambling Commission .
The Gambling Act 2005 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.
The MPs say 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.
John Whittingdale, Tory chairman of the committee , said: "Gambling is now widely accepted in the UK as a legitimate entertainment activity.
"We took a lot of evidence in this inquiry, from all sides, and while we recognise the need to be aware of the harm caused by problem gambling, we believe that there is considerable scope to reduce and simplify the current burden of regulation and to devolve decision-making to a more local level.
"The 'reluctantly permissive' tone of gambling legislation over the last 50 years now looks outdated."
The committee of MPs, from across the main parties, said the Government also needed to make it more attractive for online operators to base themselves in the UK.
Taxes on the industry were too high, pushing most internet-based operations abroad, their research found.
And the MPs say that by allowing high street betting shops to operate more than four high-stake machines, it would prevent them clustering together in town centres.