The report said that there are particularly acute problems among punters who bet on newer and fast-growing forms of gambling such as online casinos and spread betting.
The Gambling Commission report found that around 32 million people - 68 percent of adults - took part in some form of gambling in the past year. This compared with 33 million people - 72 percent of adults - in a similar survey eight years ago.
The fall was largely due to fewer people buying National Lottery tickets. Although the lottery remains the most popular gambling activity, the proportion of people taking part has fallen from 65 percent in 1999 to 57 percent this year.
However, leading academics who wrote the report cautioned that the figures are 'conservative', and predicted dramatic increases in both gambling and addiction levels.
The survey found that six per cent of the population, around 3.6million, gambled on the Internet last year, either placing bets online or visiting casino websites.
Some groups were found to be far more susceptible to addiction, including those who smoke and drink heavily, those who start gambling before their mid-teens and those who bet on newer forms of gambling.
High addiction rates, almost 11.2 per cent, were also found among users of Fixed Odds Betting Terminals gaming machines.
The authors of the report, which was based on a survey of 10,000 households, admitted shock over similar addiction rates between 1999 and 2007, but predicted striking increases as the impact of advertising and the easier availability of gambling is felt.
"Problems are associated with the new forms of gambling, and those forms are expected to grow. It's not just the Internet. We will see more gambling through mobile phones and interactive television," the Daily Mail quoted Mark Griffiths, Professor of Gambling Studies at Nottingham Trent University, as saying.
Professor Jim Orford, of the University of Birmingham, said there is 'enormous scope' for a boost in gambling, predominantly online betting, which could further lead to higher addiction rates.