Ladbrokes Coral, bought by GVC for close to 4 billion pounds late past year, operates close to 3,500 high street betting shops across the United Kingdom, employing over 25,000 people.
The decision follows complaints that the machines, which enable people to bet up to 100 pounds ($135) every 20 seconds on electronic games such as roulette, were highly addictive and had led to gamblers building up big losses. "It is really not acceptable to be able to walk in off the street and stake such a high amount with no checks or safeguards in place whatsoever".
However Peter Jackson, chief executive at Paddy Power Betfair, said: "The wider gambling industry has suffered reputational damage as a result of the widespread unease over stake limits on gaming machines".
The decision goes further than the recommendations of a review carried out by the gambling regulator earlier this year, which recommended the maximum stake for FOBTs should be set at or below £30.
But the machines are blamed for addiction, crime, debt, violence and family breakdown and their users are concentrated in some of the poorest communities.
"Those of us who have campaigned on this issue include trade unions, MPs, charities, think tanks, businesses, churches and other faith groups and most of all, concerned members of the public, some with very harrowing family stories".
But today's announcement has been met with concern by some bookmakers, who fear the move will result in store closures and job losses.
The terminals are a major source of income for high-street bookmakers which had argued that a cut to the lowest possible option would threaten thousands of jobs.
This is a decision that puts player protection first, and will allow the gambling industry as a whole to move forwards and create a safer, more socially responsible environment for consumers.
A major multi-million pound advertising campaign promoting responsible gambling, supported by industry and GambleAware, will be launched later this year.
Mr Millar, who holds an annual conference in Cardiff on problem gambling, called FOBTs a "public health menace which ruin people's lives".
As part of the next licence competition the age limit for playing National Lottery games will be reviewed, to take into accounts developments in the market and the risk of harm to young people.
But what exactly are FOBTs and why has the government seen fit to step in and make the huge change?
The government has not revealed what level it plans to raise the online tax to at this November's Budget, but an increase to 20% from the current 15% would appear to be the minimum, and it may opt for parity with the existing Machine Gaming Duty of 25%.