"I know it's possible because many societies are already exceeding this amount. The top six societies average 40.5 per cent pay-out, with one of the top societies paying out 46 per cent.''
For every 1 per cent that this threshold was increased, $7 million more gambling money would be returned to the community.
Gambling trusts could already choose to return up to 67 per cent of pokie proceeds, depending on their management costs.
The reforms would also attempt to stamp out conflicts of interest in the gaming sector, and would give power to the Department of Internal Affairs to cancel gaming licences more easily.
Societies which were well-behaved would be given longer licences as an incentive.
Licences were currently given to pubs and clubs annually, but Mr Tremain said licences could be extended to two or three years.
Mr Flavell said that he was pleased with the new legislation which dealt with issues outside the scope of his Gambling (Gambling Harm Reduction) Amendment Bill.
A select committee this week recommended that the bill be passed into law with significant amendments. The proposed changes prompted Labour and Greens to reverse their support for the bill.
Mr Flavell told media that small steps in the right direction were better than no change at all.
However, he expressed concern about the racing industry's ability to use proceeds from gambling machines for stake money. His bill had proposed ending the racing industry's special status.
Mr Tremain said National could not agree to this law change in difficult economic times because the racing industry employed 15,000 people.
The new legislation would be introduced to Parliament later this year.