The Gambling Review Body is reported to have ruled out extending gambling to pubs in its recommendations to the Government.
Leaked reports suggest the recommendations, submitted to Tessa Jowell at the Department of Culture, Media and Sport (DCMS), do not favour allowing betting on horses and dogs in pubs.
Trade bodies including the Brewers and Licensed Retailers Association have urged ministers to extend gambling to pubs in submissions over the last year.
They claim pubs should be entitled to take bets since they already entertain many gamblers with racing coverage and are subject to strict licensing laws which make it easy to monitor gambling.
But betting shop owner Ladbrokes, among others, opposed these views arguing that alcohol and gambling should not be mixed and that the pub environment did include under-18s in some outlets.
The new report also recommends that ministers review the jackpot limits on AWP machines - although it is thought that this relates to £1,000 jackpot machines in casinos and clubs rather than pubs, where the limit is £15, expected to rise to £25 at the gaming industry's triennial review in the autumn.
The review body recommendations will now be considered by the DCMS, which is due to publish a bill on reforming the legislation.
Full details of the report will not be available until the middle of the month.
A spokeswoman for the DCMS said that although she could confirm that ministers would be looking at whether to raise the £1,000 limit on AWP machines as recommended in the report she could not shed further light on what the final draft would say.
It is believed that the recommendations also call for a relaxation of regulations for betting shops, which are likely to be allowed to have fruit machines with bigger jackpots and to sell lottery tickets.
There are no plans to change the legal betting age of 18.
Gambling decision is imminent (June 1, 2001)