An investigation has been launched after it was found payment cards given to asylum seekers to purchase essential items had been used thousands of times to gamble.
Over the last year, up to 6,537 people used the government-issued cards at least once in establishments such as bookmakers, amusement arcades and casinos .
Attempted transactions were recorded on gambling websites, but those payments were blocked.
However, data revealed in a Freedom of Information request by PoliticsHome showed other cases of cash withdrawals being made in or near gambling venues, located using the terminal's ID number.
Asylum seekers are given a chip and pin debit cards called an Aspen card when they arrive in Britain.
The cash on them is intended to provide weekly support to buy essentials such as food, clothing and toiletries.
Migrants being housed in hotels that provide meals are given an allowance of £9.95 a week, while those in self-catered accommodation usually get £49.18 a week.
There are around 80,000 of the taxpayer-funded cards in use in the UK.
Data showed a peak of 227 attempts to use the cards to gamble in a single week last November.
At the lowest point, there were 40 attempts in a week last July.
The revelation is likely to fuel concerns about the rising number small boat crossings and the cost to taxpayer.
More than 20,000 people crossed the English Channel in the first half of this year – a rise of 50% on the previous year.
Shadow home secretary Chris Philp said: “Labour are allowing over 6,000 illegal migrants to use taxpayer-funded cards to place bets while British families struggle to make ends meet. Labour are literally letting illegal migrants gamble with our hard-earned taxes.
“This is the latest symptom of a system Labour has completely lost control with record small boat crossings, more illegal migrants in hotels despite their promises, and no plan to fix it.”
A Home Office spokesperson said: "The Home Office have begun an investigation into the use of Aspen cards.
"The Home Office has a legal obligation to support asylum seekers, including any dependants, who would otherwise be destitute."
