Tests have shown that almost 90 per cent of pubs in England failed to prevent children using adult gaming machines.
The report, by the Gambling Commission, was the result of working with licensing authorities and police to test compliance with laws that protect children from gambling.
Under the rules, pub staff are expected to stop kids from playing on the Category C machines – as well as provide clear signage of the age restriction.
Speaking about the results, programme director at the Gambling Commission, Helen Rhodes, said the watchdog was "extremely concerned".
Helen said: "We urgently call on the pub sector to take action immediately to enforce the laws in place to protect children and young people.
"We expect to see significant improvement in further tests and will continue to work with licensing authorities to support any action required against those failing to adhere to the requirements."
The current failure rate of 89 per cent is very high compared to other laws, such as alcohol and tobacco, which are around 15 to 30 per cent.
The Commission has now written to the pub industry outlining the findings of the work, and calling for improvements.
It said publicans should ensure there are procedures for:
• Checking the age of those who appear underage
• Refusing entry to anyone unable to produce an acceptable form of identification.
• Pubs should take all reasonable steps to ensure that all relevant employees understand their responsibilities for preventing underage gambling.
Further tests are due to take place in the coming months with the Commission saying it expects improvements to have been made.
It also said it would: "support licensing authorities in their further actions against operators who fail to meet the conditions of their permits and will also not hesitate to amend the Code of Practice for gaming machines in clubs and pubs if that is proved necessary."