A parliamentary report has stated that the Gambling Commission and the Department for Digital, Culture, Media & Sport have an "unacceptably weak understanding" of how gambling can harm people.
The Public Accounts Committee described the regulator as "toothless" and highlighted its lack of measurable targets for problem gamblers. It also described the Department for Digital, Culture, Media & Sport as "complacent".
Despite complaints, the Commission stated that it had been upgrading player protection measures.
It, did, however, say: "We accepted before the Committee that there is always more to do and we are carefully considering the findings of their report to see what other additional steps we can take."
The report also criticised the body's attitude towards problem gambling.
"The government has approached other public health issues on the basis that prevention is better than cure," the report said. The Public Accounts Committee's role is to scrutinise the value for money of government projects.
"However, the department was unwilling to accept the premise that increasing the commission's budget to prevent harm would be preferable to spending on treating problem gamblers."
Despite the fact that licence fees generate some £19 million for the Gambling Commission every year, the sector turns over more than £11 billion a year, spending an annual fee of around £60 million to treat problem gamblers.
The PAC report stated that there are about 395,000 problem gamblers who "bet compulsively" in the country. Apparently, as many as 1.8 million more are "at risk" of addiction.
"The effects can be devastating, life-changing for people and whole families, including financial and home loss, relationship breakdowns, criminality and suicide.
Meg Hillier MP, who chairs the committee, called for reform.
"What has emerged in evidence is a picture of a torpid, toothless regulator that doesn't seem terribly interested in either the harms it exists to reduce or the means it might use to achieve that."
"The commission needs a radical overhaul: it must be quicker at responding to problems, update company licence conditions to protect vulnerable consumers and beef up those consumers' rights to redress when it fails."
