The Gambling Commission has been accused of failing to keep betting firms in check and curb problem gambling.
In a report, the National Audit Office (NAO) found the industry watchdog was unable to keep up with a rapidly changing landscape.
It believes the Commission does not understand how mobile betting in particular causes addiction.
The NAO criticised the watchdog for having the clear aim of reducing problem gambling, while having no clear strategy of how it will achieve this.
As an example, it said: “the Commission wants to see the number of people affected by problem gambling to reduce significantly but has not articulated what level of reduction, over what period of time, would indicate good progress”.
“The way people gamble is changing, with new risks emerging in online and mobile gambling and other technological developments.”
But it added: “The Commission is unlikely to be fully effective in addressing risks and harms to consumers within the current arrangements.”
Carolyn Harris MP, who chairs the All-Party Parliamentary Group on Gambling, said: “The Government must urgently intervene to ensure that the gambling industry, particularly the online sector, parts of which seem to operate like the wild-west, is properly regulated and that consumers are protected.”
Revd Dr Alan Smith, the Lord Bishop of St Albans, said: “Many of us in Parliament are stunned by the sheer magnitude and scale of gambling firms’ profits when the regulator, reliant on their funding, seems clunky, dated and chronically short of money.”