In an undercover investigation for The Times last April, Mr Benton, who was the chairman of the all-party parliamentary group on betting and gaming, offered to leak a confidential policy document in advance of its announcement and lobby ministers on behalf of gambling investors.
The panel described Mr Benton’s arguments against his recommended punishment as “misconceived or erroneous” and found the sanction was “neither unreasonable nor disproportionate”.
It also dismissed allegations about a leak from the committee as having “no substance”, adding: “There was no procedural flaw in the process”.
On Tuesday, Labour called for Mr Benton to quit the Commons immediately and trigger a by-election now instead of waiting to be ejected through a parliamentary recall petition.
Jonathan Ashworth, the shadow paymaster general, said: “Scott Benton should do the decent thing and resign, saving the people of Blackpool South a lengthy recall petition that would leave them without the representation they deserve.
“This is yet another by-election caused by Tory scandal. Britain deserves better than this carousel of Conservative chaos. Labour’s Chris Webb is Blackpool born and bred, and ready to deliver a fresh start for Blackpool South.”
Labour will be optimistic about its prospects in the seat, with polling suggesting it is on track to win back most if not all of the Red Wall at the next general election, expected to take place later this year.
