A friend of mine once arranged to interview a legendary footballer of the 1970s, who was living in retirement in a tower block in west London. The journalist took the lift to the top floor of the tower block and knocked on the legend's door. No answer. He knocked on and off for a while. Finally a voice shouted from inside: "Throw the money through the letterbox."

The journalist reminded the legend that they had an appointment. "Doesn't matter," said the voice. "Throw the money through the letterbox." The journalist took all the notes from his wallet and stuffed them through the letterbox. Still the door remained shut. The journalist knocked for a while longer but eventually gave up and took the lift down. In the tower block's entrance hall he asked an old man if he knew where the legend was. "He just got out of the back lift," said the old man. "He'll be at the bookie's by now."

Long before Wayne Rooney, the Manchester United and England star, who was revealed this month to have run up £700,000 in gambling debts, it was possible to line up an excellent all-time XI of footballers ruined by ponies and dogs. Working-class men have always been over-represented among problem gamblers.

What has changed in Britain in the past decade is that football has become even more popular and gambling has spread through all social classes and both genders. In the UK, world leader of the booming gambling industry, betting has become epidemic and that's even before this summer's World Cup, which will be the biggest betting event in history.

It is likely that millions of Britons will bet on the outcome of World Cup matches - footballers among them. And while it should be stressed that there is no evidence that Rooney's gambling was illegal or improper, there is evidence that poorer footballers than him have thrown matches in both national and international competitions. These players are tempted by the betting money flooding into the sport following the demolition of social and legal restrictions on gambling.

Into the 20th century the Methodist and Nonconformist churches helped enforce the taboo against gambling. In times when families had scarcely any disposable income, a father could gamble away a week's food with one modest bet. Betting shops were illegal in Britain for 108 years from 1853. But, as the churches weakened, so did the taboo. After betting shops were legalised in 1961, dozens opened every week for eight years. Ladbrokes, the world's largest bookmaker, became the most common presence on British high streets after the Post Office.

Still the law said that gambling should be legal but not stimulated. However, in 1994 that policy was ditched when the government introduced the National Lottery. "That really did turn us into a nation of gamblers," says Mark Griffiths, professor of gambling studies at Nottingham Trent University and a gambler himself. "It meant that two thirds of the British population were regularly gambling. It brought women into gambling. Gambling became destigmatised."

Before the 1990s, betting had been mostly confined to smelly shops populated by dead-eyed punters. "The bookies had opaque coverings, you couldn't see in, they were like sex shops," says Griffiths. But, in 1994, the law changed to allow betting shops to serve food and light refreshments and have windows open to the street. Today you can find non-smoking bookmakers and bookmakers serving decent hot meals. In 2004 a Ladbrokes executive told me: "You can go into our shop at Piccadilly Circus and see grannies having a coffee, not actually realising it's a bookmaker." Griffiths says: "Gambling has gone from being a sin to a vice to a perfectly acceptable leisure activity."

In a survey by the Office for National Statistics in 2001, 90 per cent of British adults said they had participated in an activity they regarded as gambling in the previous 12 months. Many of these people would still never enter a bookie's but they no longer have to. They can bet online instead. The greatest communications device in history turns out to be ideal for porn, spam and betting.

The internet represents only a small slice of British gambling but it's a growing slice. It is also drawing in a new kind of punter. Online gamblers tend to be more upmarket than the betting-shop regular, more interested in football than horseracing, and less British. The world bets with British bookies. Ladbrokes has 13 foreign-language websites. William Hill has online clients in 197 countries.

Partly this is because British bookmakers have spent decades building a reputation as upstanding operators who won't disappear or chop off your legs if you win a bet with them. "UK companies have given a lot of credibility to the industry," says David Clark, a former director of Camelot, the Lottery operator, and now a gambling consultant.

Partly this is because, apart from Australia, there is nowhere in the western world where betting is freer than in Britain. In the US most gambling is illegal. In continental Europe, the state gambling monopolies rarely try to stimulate demand and rarely allow bets on an individual match or race. The ambitious punter is driven to Britain.

The result is a British bonanza. The National Audit Office last year estimated the turnover of gambling in the UK at £53bn. Even with some of this money coming from abroad, that implies far more betting by each Briton than the £197 per household estimated by the government's expenditure and food survey. In fact, there are no reliable figures for gambling. Its rate of growth is similarly undocumented but experts have spoken of a fivefold or sevenfold rise since the millennium. Another measure is the turnover of Ladbrokes and ­William Hill: which rose by, respectively, 110 per cent and 219 per cent between 2002 and 2005.

In hedonistic, sports-loving, profit-maximising, secular, Britain, anyone opposing gambling risks looking po-faced. In any case, the government is not about to destroy a growth sector in which the UK is the world leader. Five years ago, the government abolished the betting tax paid by punters. Now it is preparing to issue licences for 17 new casinos, one of them a giant. Any disquiet it feels is assuaged by asking the British gambling industry to contribute £3m a year (or 0.006 per cent of its turnover) to deal with problem gamblers. Admittedly, the £3m hasn't been raised yet but you can't have everything.

The only national betting prevalence survey held in the UK, in 2000, defined 0.6 to 0.8 per cent of British adults - about 300,000 people - as "problem gamblers". This was a modest proportion compared with most other countries for which data exist. However, the British problem has probably worsened since. The Gaming Board for Great Britain, the Betting Office Licensees Association, the Bingo Association, the minister of sport and others agreed in evidence to a House of Commons select committee in 2002 that "it was likely that increasing access to gambling will increase gambling problems".

The internet appears particularly ­dangerous. First, the speed of the net encourages "betting in running", whereby punters keep placing bets as a match progresses, a classic way of throwing bad money after bad. Second, on the internet there is rarely a gatekeeper: nobody to tell the problem gambler to go home now.

The spectre for Britain is Australia, which liberalised gambling and is thought to lead the world with 2.3 per cent of its population now problem gamblers. The UK's Gambling Commission hopes to publish another prevalence study next year. Until then all we have are the estimates

from the couple of small charities that help gambling addicts. Gordon House, which helps severe cases, says: "There's a rapid increase in the number of referrals to our centre. In the past you had to go out and find gambling. Now gambling comes to you." Gamcare, a larger charity, suspects the problem may be growing but admits: "It's a hidden addiction."

Little is known about problem gambling because almost nobody is interested enough to fund research or charities. In fact, the growth of the problem has ­co-incided with a decline in ­official concern. Griffiths recalls the Department of Health once assembling a group of experts to discuss gambling: "We met once. We've never met since."

Few Britons may care about gambling addicts but they do care about the results of sports matches. Sports fans account for much of the increase in gambling but they should be the people most worried about it, because the more money that is bet on matches, the greater the incentive for players, coaches and club owners to fix them. There have been football bribery scandals in several European countries. The World Cup may not be immune.

S port has arguably always been a mere adjunct of the gambling industry. "I ­suspect that from the first time anybody competed against anybody else, there was a bet involved," says Richard Crepeau, sports historian at the University of Central Florida.

Betting helped create professional sport because it gave people an incentive to pay to watch matches. The earliest record of a cricket match, for instance, in 1646, occurs in a court case over a wager of 12 candles on a match at Coxheath in Kent. In the 18th century, gambling by noblemen underwrote cricket matches.

College basketball in the US had similar origins. Crepeau says the game first became popular in the 1930s, when double-headers were staged at Madison Square Garden in New York, chiefly for the benefit of gamblers. In the US it's customary to bet not on which team will win but on the size of its winning margin: the so-called points spread.

"The invention of the points spread - somebody once said it's the greatest invention since the zipper - meant that any basketball game could be bet on, even the biggest mis-matches," Crepeau says. "They say that if you went to games in the Garden you could hear people cheering for and against the points spread."

College basketball averages about one "point-shaving" scandal a decade, with teams conspiring to win or lose by a certain margin. "With the points spread, you don't have to pay a team to lose; you just have to say, 'Don't win by too much,'" says Crepeau. And since college athletes are unpaid, "it isn't an expensive proposition to fix a game."

Even in professional sport, the income of players and clubs is often dwarfed by the volume of bets on their games. That is why Asian bookmakers were able to bribe international cricketers in the 1990s.

The less players earn, the bigger the temptation to throw matches. The most recent bribery scandals in European football have occurred in the little Belgian league, the German lower divisions, Greece and most leagues in eastern Europe. This week, fairly typically, the main shareholder of the National Bucharest club said he would give his players a lie detector test after they had suffered two unexpected defeats running.

At a midnight dinner in Skopje, Macedonia in 2002, I heard how corruption seeps out of eastern Europe into international football. Braco Vujcic, Balkan representative of the German media company Ufa, told me he had experienced this at first hand. Because Ufa owned most television rights to Balkan football, Vujcic was, in effect, the ultimate controller of the region's clubs and leagues.

Over Turkish coffee and cigarettes, he told me about a match in the summer Intertoto Cup between a Macedonian team, whose rights belonged to Ufa, and an Icelandic side. A couple of weeks before the first leg, an Albanian phoned one of the Macedonian club's directors and offered him €120,000 to fix the result. Later someone else made another offer. Vujcic, as the club's ultimate controller, turned both down. Then, he says, "the owner of a Croat betting office called me one day before the game and asked me why I wouldn't let everyone make some money."

Vujcic believes he failed to keep the match clean. He said this was a common problem in European ties, and was inevitable when a Balkan footballer could be bought for €5,000.

Often the match-fixers bet with British bookies, who will offer odds on anything. In 2002, for instance, British bookmakers noticed a plethora of bets on Dynamo Tirana to lose their Champions League qualifying round match 0-5 at home to Brondby of Denmark. At odds of 100-1, a bet of £10,000 would have netted the match-fixers £1m. In the event they got it wrong: Brondby just couldn't score the last goal and the match ended 0-4.

The results of obscure Balkan ties may not unduly trouble the British punter but they should. First of all, expect this corruption soon to reappear in Britain. English football's last bribery scandal broke in 1994. With the new flood of betting, the next one will probably occur before long in the lower divisions, with players taking bribes to buy a new kitchen. Once the public suspects that a sport is rigged, that sport loses its appeal.

The other worry is underpaid foreign players in international tournaments. When Chelsea face an impoverished team of eastern European no-hopers in a group match of the Champions League next season, how do they know the impoverished no-hopers are trying?

At the World Cup, perhaps a quarter of the players will not be millionaires. They will also be competing in the largest betting event in history. Graham Sharpe, a director of William Hill, estimates that more than £1bn of bets will be placed on the World Cup. Most players presumably have too much professional honour to throw a meaningful match. But if their team is already knocked out with a game still to play, honour may not count for much.

Referees, who earn less than players, and can decide a match with one blow of the whistle, are particularly vulnerable. The last World Cup was marked by some, much-discussed, bizarre refereeing decisions. To avoid such controversy this time, Fifa, the international football authority, is doubling the pay of the tournament's referees to about €35,000 a man for the month. Let's hope this is enough to dissuade them from earning more elsewhere.

Otherwise, if they fancy it, they could simply get online with the wife's credit card and, along with the rest of the world, have a punt with a British bookie on their next game.