The updates brought to Cabinet by Minister for Justice Charlie Flanagan also require a €500 payout limit from any electronic gaming or slot machine.
Proposals in March planned for a maximum stake of €10 and payouts of €750, with Flanagan reportedly scaling down the figures in response to protests by problem gambling groups and politicians.
The government also plans to raise the age required to use gambling machines. At present, 16-year-olds are permitted to use them; this will be increased to 18.
Current Irish gambling legislation has been in place since 1956.
The Department of Justice said: "Modifying stake and prize amounts is the only current role of the Minister for Justice and Equality with regard to gaming machines. The proposal had been to raise these amounts to €10 and €750 respectively.
"However, during the Dáil committee stage debate on 10 July on the modernisation of the stake and prize amounts, some deputies felt the proposed amounts were excessive. The Minister of State undertook to consider the matter and now proposes €5 and €500.”
