The maximum bet on fixed-odds betting terminals will be cut from April after the government bowed to pressure.
Ministers had been facing a parliamentary defeat, with several Tory MPs joining opposition politicians to table amendments to the finance bill.
The chancellor said in the Budget the maximum bet would be reduced from £100 to £2 from October.
But that led to accusations of a delay - with sports minister Tracey Crouch resigning in protest.
Several former ministers - including Boris Johnson, Iain Duncan Smith and Justine Greening - tabled amendments designed to force the government to make the change from April.
Fixed-odds terminals were introduced in casinos and betting shops in 1999, and offer computerised games at the touch of a button.
What has the government done?
Culture Secretary Jeremy Wright said: "The government has listened and will now implement the reduction in April 2019."
Mr Wright added that a planned increase in Remote Gaming Duty, paid by online gaming firms, would be brought forward to April to cover the negative impact on the public finances.
Ms Crouch said she welcomed the decision and was pleased that "common sense" had prevailed.
Asked if she would like to return to Government, Ms Crouch said: "There isn't a vacancy. That's been filled. So, I will just get on and do what I'm going to do."
The government had earlier said it had consulted widely and considered "all of the evidence" before making its decision on a timeframe.
What happened earlier today?
Theresa May had earlier been asked at Prime Minister's Questions on Wednesday about the timing by Conservative ex-leader Iain Duncan Smith.
He said: "I was enormously proud of my government for agreeing to lower the stake on fixed-odds betting terminals to £2 because they have caused endless harm, terrible damage to families and it was the right decision.
"Since then, there has been a hiatus about the date at which this would start."
Mrs May answered: "I recognise the strength of feeling on this issue. I know gambling addiction can devastate lives."
How important are FOBTs to bookmakers?
By Tom Edgington, BBC Reality Check
FOBTs were introduced into betting shops in 1999. Since then, the number has grown to 33,468 in Great Britain.
Data from the Gambling Commission shows that the profit generated by FOBTs grew from £1.05bn in 2009 to £1.83bn last year - that's a rise of 74%.
Last year, betting shops made £3.2bn from a combination of FOBTs and traditional "over-the-counter" bets. As a proportion of profits, FOBTs made up 57% of the total - up from 38% in 2008-09.
That suggests that bookies are becoming increasingly reliant on them as a source of profit.
Why has the government been looking at this issue?
FOBTs have been under criticism for encouraging high-stakes gambling and exposing people to the risk of gambling harm.
The machines have been called the "crack cocaine" of gambling by campaigners who say they let players lose money too quickly, leading to addiction and social problems.
The government began to look at FOBT machines in October 2016, when it made a "call for evidence" on the number and location of terminals and the measures in place to protect players.
How has the market reacted?
Investors appeared to welcome the recommendations, as shares in gambling firms have climbed, with Ladbrokes Coral-owner GVC Holdings 8% higher and William Hill shares up 2.23%.
After the government brought forward the FOBT deadline, it meant GVC Holdings was spared a major cash payment to former Ladbrokes shareholders, analysts said.
What has been the political reaction?
Tom Watson MP, Labour's Shadow Digital, Culture, Media and Sport Secretary, said it had taken "the resignation of a good minister and a cross party revolt to achieve the blindingly obvious and necessary reforms to fixed-odds betting terminals".
He added it was "a very good day for the many thousands of people whose families and communities are blighted by gambling addiction".