Proposed gambling changes in Hastings could put $7.8 million in community grants at risk, the First Light Community Foundation says.
But the Problem Gambling Foundation CEO says the public health harm of gambling and people losing money on pokies should be the focus ahead of grants.
On Tuesday, Hastings District Council will consider submissions on a proposal to introduce a Class 4 Gambling Venue sinking lid policy with no relocation.
It has been recommended by the District Planning and Bylaws Subcommittee to reduce the harm of gambling in the district.
Councils are required to review their gambling policy every three years.
A sinking lid policy is adopted with an aim of decreasing the number of gaming venues or machines over time. It introduces a ban on new machines and venues and if a venue closes and the licence lapses, those machines cannot be re-established elsewhere.
This differs from the current capped policy where the number of machines allowed in the district remains at 293 machines if a venue closes.
There are currently 283 machines in the district.
It is also proposed that there would be a cap of one TAB venue, meaning no new standalone TAB venues will be permitted. This does not include TAB facilities located within clubs or bars.
One of 30 submitters who opposed the proposal, Hastings-based not-for-profit First Light Community Foundation, which has 18 machines at Zabeels, says it could wipe out more than $7.8m in grants for the community.
Director Mark Sowman said the proposal will "in time see all machines removed from the district" and therefore with less money to distribute, the council will need to consider how it picks up the shortfall.
"At risk is over $7.8m in grants that over 80 Hastings schools and community groups received in 2019."
He said these organisations have "an immense positive social impact" and they shouldn't be put at risk of being unable to continue what they do well.
He said with the already reducing number of gaming venues, 32 in 2003 down to 17, "the erosion of the community funding infrastructure" means more grant applications are being declined.
"Quite simply demand is already exceeding supply."
But Problem Gambling Foundation CEO Paula Snowden, one of 16 who submitted in favour of the proposal, said a strong sinking lid policy addresses parts of the commercial environment that makes problem gamblers vulnerable.
Sinking lids will have impacts over time but only if machine numbers come down in our poor communities, quickly and in larger numbers than currently she said.
She said for every problem gambler, gambling harm affects six people.
"It causes suffering and hardship, crime, depression and anxiety and family violence.
"New Zealand lost $939m in 2019 and of that about $300m was paid out in grants to communities – the rest runs the system."
Sowman, like other submitters, also raised concerns that the sinking lid would cause a move towards online gambling, where profits would not benefit the local community.
But Snowden said "there is no evidence to support this fear" and that "the opposite was true with class 4 pokie gamblers gambling less".
She said using class 4 pokie losses to fund community grants is "unjust and inequitable" and unsustainable, and another way to support local community and sport "without taking money off the poor, their families and problem gamblers" needs to be found.
The council will be considering three different options on Tuesday.
Option one is a new cap level of 283 machines and the retaining of relocation policy.
Option two is to retain the current cap level and relocation policy and option three is the sinking lid policy with no relocation policy.
A council spokesperson said the reliance of community organisations on funding from gambling charities will be weighed against the harm caused.
"The council will give balanced consideration to all the submissions from the community, both in support and against the proposal, when it considers the matter."