Stewart Kenny, who founded Paddy Power, slammed the terminals in a consultation response to the Irish government in 2009.
The machines - dubbed the 'crack cocaine of gambling' - allow punters to bet £100 every 20 seconds and they raise billions in revenue for the British betting industry.
Bookies have repeatedly insisted to regulators in UK the machines are not more addictive than other forms of gambling.
Mr Kenny said they were 'particularly enticing to younger gamblers in disadvantaged areas', in a submission uncovered by The Times.
““He claimed the machines were allowed in Britain only because the UK treasury was 'as addicted to the tax revenue [from the machines] as vulnerable customers are to losing money in them'
”
In the past 12 months, bookies made £1.75 billion from FOBTs - producing taxes worth £438 million.
The Government is consulting on tighter regulations amid demands the maximum stake allowed should be slashed from £100 to £2.
Players bet on electronic casino games such as roulette, can re-bet any winnings immediately and are enticed to keep playing with sounds, bright lights and moving graphics.
Mr Kenny - who was serving on the Paddy Power board until last summer - would have stood to see his company gain from allowing the machines in Ireland.
““In the UK, Paddy Power operates 1,400 FOBTs in 350 betting shops
”
But lobbying against his own interests, he said: 'There is no public demand, other than from sections of the betting industry, for FOBTs to be legalised in Ireland. It is in no one’s interest, neither betting shop customers nor wider society.
'Let us learn from the mistake in the UK of allowing them into betting offices, once they are in it is impossible to get rid of them or even curb their more addictive elements.'
Labour MP Carolyn Harris, who chairs a parliamentary group on FOBTs, welcomed the remarks.
She told The Times: 'This admission is refreshing. The gambling industry should not be encouraging people to get involved with something that they know carries a high risk of them losing all their money and in many cases their sanity because the addiction is driving them to desperate levels.'
David Lammy, another Labour MP, said: 'FOBTs destroy lives - addiction, debt, destitution, depression and family breakdown. Action is well, well overdue.'