* Concern over clusters of betting shops, gambling machines
* Cash spend of users controlled, planning laws changed
* Shares rise on relief that curbs not more severe (Adds industry reaction, shares)
By Keith Weir
LONDON, April 30 Britain is tightening controls on the spread of betting shops and the high stakes gambling machines that account for a growing part of their business, the government said on Wednesday.
Britain has a well developed gambling industry and betting shops have been a feature of the high street for more than 50 years after they were legalised in the early 1960s.
However, public concern has been growing over clusters of shops housing machines on which gamblers can stake up to 300 pounds ($510) per minute playing games such roulette.
Critics say they fuel gambling addiction, an accusation disputed by the bookmakers. There has also been a suggestion that they make it easier for criminals to launder money.
Local councils will be able to refuse applications by bookmakers to open new shops on the high street in a change to planning laws, the Department for Culture, Media and Sport said.
Customers who want to spend more than 50 pounds ($84) on machines will be required to pay at the counter or on account, rather than being able to feed large sums of cash in directly.
The machines account for around 1.5 billion pounds of annual revenues for British bookmakers including William Hill and Ladbrokes and Ireland's Paddy Power.
Shares rose on relief that the measures were not more draconian, with no new limits on stake sizes or speed of play.
Ladbrokes, Britain's second largest bookmaker and heavily reliant on its retail business, was up 7 percent to 153.3 pence by 1340 GMT despite earlier reporting a halving of first quarter profit.
Market leader William Hill added 3.6 percent to 359.9 pence.
"We want there to be a gambling sector that is vibrant and responsible," Sports Minister Helen Grant said.
The new regulations come on top of higher taxes on the gambling machines announced in the budget in March which will cost the industry around 75 million pounds each year.
Ladbrokes said the combination of the tax rise and regulatory changes meant more betting shops would shut.
"Today's announcement from the government is the latest in a series of measures which will inevitably impact the betting industry, hit shop profitability and threaten jobs," Chief Executive Richard Glynn said in a statement.
William Hill said last week that it planned to close more than loss-making 100 betting shops this year, blaming the tax rise. Ladbrokes is also closing 50 shops this year and said more could follow in 2015.
William Hill took a more conciliatory line on Wednesday, recognising the need for the government to respond to public worries over gambling.
"The proposed recommendations are a balanced response," Chief Executive Ralph Topping said.
Analysts said the impact on the sector would be limited.
"At this stage we regard these initiatives as relatively benign," said James Ainley of Citi, adding he did not expect to change profit forecasts on the back of them. ($1 = 0.5936 British Pounds) (Editing by Alison Williams)