Covid-19 and the subsequent lockdown from late March to mid-May meant bars, gaming venues and pubs weren't open for almost eight weeks, significantly cutting down potential spending over the three-month period.
Whanganui mayor Hamish McDouall said the figures were a massive worry for the town.
"For Whanganui which doesn't seem to be getting its share of the return to the community in anyway. From my reading of the figures, it is getting a very low share in comparison to what it should," he said.
"It makes it pretty hard to argue for the benefits considering how much money is going out of the community."
Under the Gambling Act 2003, at least 40 per cent of Class 4 gaming intake is required to be contributed to community causes.
In 2019, player losses on Class 4 machines in Whanganui totalled $11.3m; 40 per cent of that was $4.52m.
Policy adviser Will Johnston said that in 2019 only 28 per cent, or $1.26m, had been donated back to organisations within Whanganui District.
The 40 per cent return was based on organisations rather than specific venues.
In 2017, Whanganui District Council introduced a sinking lid policy under its Gambling Venues Policy which has seen the number of machines drop from 225 to 208 according to DIA data. Those 208 machines are scattered across 14 venues in Whanganui.
McDouall said something needed to change.
"Obviously that would offset some of the pain some families are going through. But that doesn't address the problem. It's extremely destructive for some people and their families.
"Are we taking money out of the vulnerable communities to give to sport clubs in Auckland? We need to be a bit more forensic."
Whanganui District Council's gambling venues policy is up for its three-year review, with a hearing set to be held in the coming months.
"We hear from sport clubs who say this is really important sources on funding and we hear from people directly by friends and whānau who have gambling problems. It's right across the spectrum of the community," McDouall said.
