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UPDATE 1-British govt weighs big cut in top stake on gambling machines

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Oct 31 (Reuters) - The maximum stake allowed on gambling machines in British betting shops could be cut to as little as 2 pounds from 100 pounds ($132), the government said on Tuesday, dealing a blow to bookmakers who rely on them to boost revenue.

Following a review of the fixed odds betting terminals (FOBTs), which critics say are highly addictive, the government said the cut was among a number of options.

The government has launched a 12-week consultation to look at cutting the maximum stake to between 50 pounds and 2 pounds.

The machines have helped to keep betting shops going when many younger gamblers have switched to betting on sports events using their smartphones or tablets.

According to Gambling Commission data, there are around 176,410 gaming machines in Britain and major listed gambling companies such as Ladbrokes Coral, William Hill and Paddy Power Betfair generate a large chunk of their retail revenue from these machines.

A FOBT is a touch screen machine that allows players to bet on the outcome of various games such as roulette.

Critics have said the machines are dangerous as they allow gamblers to stack up very heavy losses in a matter of minutes.

The government said that the process was aimed to reduce the potential for large losses on the machines and the risk of harm to both the player and wider communities in which these machines are located. ($1 = 0.7573 pounds) (Reporting by Rahul B in Bengaluru; Editing by Louise Heavens/Keith Weir)