Pubs are set for a boost thanks to government plans to increase the maximum stake and prize for AWP machines to a higher level than first expected.
Pressure from the trade has meant the Department for Culture, Media and Sport (DCMS) is now prepared to raise the limits to £1 for stakes and £70 for prizes on category C machines.
The government previously favoured increasing the stake limit to 60p and the prize limit to £60.
However, following a consultation launched last summer, the DCMS says it is prepared to raise the maximum levels even higher. The new levels, which could be in place by this spring, would apply until 2012.
A DCMS spokeswoman said: "After careful consideration and representations from the industry on the difficult trading conditions they are facing, we are proposing increases to stakes and prizes for lower category gaming machines.
"These measures will help seaside arcades, family entertainment centres and pubs, as well as manufacturers while ensuring that the licensing objectives of the Gambling Act, such as the protection of children and vulnerable people, are not put at risk."
In the consultation document it says the DCMS now accepts the current option "would bring a number of benefits and is the best way forward".
The number of AWP machines in pubs and clubs is around 85,000 and according to The Publican's 2008 Market Report 52 per cent of pubs have AWP machines. Average profit contribution is around seven per cent.
Mark Hastings, communications director at the British Beer & Pub Association, said the body was "pleased" the government had listened to its case for an increase. "This should offer some welcome respite to some pubs during what is a difficult time," he added.
The DCMS estimates that the changes will bring an extra 20 per cent in revenue for the gaming industry and the Treasury will receive an extra £27m a-year in VAT.
The current consultation closes on January 19.