The British Horseracing Authority "welcomed the Government's determination to address the issues raised by problem gambling" after it was announced maximum stakes on fixed-odds betting terminals will be limited to £2.
The Government announced on Thursday morning it was slashing the maximum from £100 to reduce the risk of "gambling-related harm".
It said the move will cut the risk of potentially large financial losses from the controversial machines as well as harm to both players and wider communities.
The decision is set to please campaigners but will come as a blow to bookmakers, which have warned it would cost betting shop jobs across the country, while the new rule would also have an effect on racing's finances.
The BHA says it "recognises the potential impact on jobs" and also announced the Government may now bring forward a review of the levy, with officials planning to look at how a system based on global bets placed in Britain would work.
A statement read: "The BHA, on behalf of the British racing industry, welcomes the government's determination to address the issues raised by problem gambling. We called for change during the consultation and we can see the government has acted decisively.
"The Secretary of State has written to the chairman of the BHA saying he understands this is not a straightforward decision for the horseracing industry and the government wants to work closely with us to address any risks.
"The government has also said it will consider bringing forward a review of the levy on betting on racing that returns money to the sport.
"He says he has asked his officials to look at how a levy based on global bets placed in Britain could work. We welcome this.
"We are pleased that the consultation response recognises the special and longstanding relationship between the betting and horseracing industries.
"We recognise the potential impact on jobs in the betting industry and will work closely together to respond to this decision.
"We will issue a full statement when we have read the full details of the government's announcement."
The decision to cut the stake to #2 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.
Culture Secretary Matt Hancock said: "When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand.
"These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all."
Tracey Crouch, Minister for Sport and Civil Society, said FOBTs can "devastate individuals' lives, families and communities".
She added: "It is right that we take decisive action now to ensure a responsible gambling industry that protects the most vulnerable in our society. By reducing FOBT stakes to #2 we can help stop extreme losses by those who can least afford it.
"While we want a healthy gambling industry that contributes to the economy, we also need one that does all it can to protect players."
The Government also confirmed a raft of measures to clamp down on the gambling sector, including plans to toughen up protections around online gambling, such as introducing stronger age verification rules and affordability checks.
A multimillion-pound advertising campaign promoting responsible gambling, supported by the industry and GambleAware, will be launched later this year, it added.
And the age limit for playing National Lottery games will be reviewed under the next licence competition.
The Government said it will fund the crackdown through an increase in remote gaming duty.
It pledged to work with the gambling sector to ensure it has sufficient time to introduce the stake reduction and technological changes.