Sports and community groups in Dunedin fear being left out of pocket if a push to cap the number of poker machines in the city is successful.
However, supporters of the move warn the social harm caused by gambling addiction means change is needed, and some are calling for even tougher rules.
The debate comes as a Dunedin City Council hearings subcommittee prepares to begin a three-day meeting on Wednesday, considering an amended ''Gambling and TAB Venue Policy''.
The subcommittee would consider the public's views on a proposal - already endorsed by city councillors - to cap the city's number of venues and gaming machines at 2013 levels.
The proposal would set the cap at levels found in the city on March 5 this year, meaning no more than 41 gambling venues, and 518 pokies would be permitted across the city.
Restrictions preventing venues from establishing in residential areas or next to schools, early childhood facilities, churches or other community facilities, would also continue.
The council voted in April to release the proposal for public consultation, and since then 635 individuals and groups have made submissions - more than were generated by Dunedin's proposed waterfront hotel.
A report by council liquor licensing and projects officer Kevin Mechen to the subcommittee said the proposed cap was supported by 17 submitters, while another eight had made general comments.
Another 11 submitters supported retaining the policy, which restricted venue locations but not the number of venues or machines in the city.
However, the bulk of submitters - 605 of them, including 594 form letters - wanted a tougher sinking-lid policy instead, citing the need to reduce the harm caused by problem gambling, Mr Mechen said.
That would see the maximum number of venues and machines reducing as venues closed or relocated.
Sport Otago chief executive John Brimble was among those to submit in support of the proposed cap, saying it would ''effectively maintain the status quo''.
Sports and other clubs remained ''very reliant'' on gaming funding to make ends meet, but the number of gaming trusts was diminishing as a result of mergers and amalgamations, he said.
''Any further reduction in the number of machines and venues will have a disastrous impact on sport and recreation bodies' ability to make ends meet and indeed survive,'' he warned.
Jill Johnson, of the Otago Softball Association, was among those calling for the status quo to be maintained, saying gaming funding was ''critical'' to the sport.
It helped the association provide affordable services and equipment, and offset competition costs, and was particularly important at junior levels, when parents were stretched, she said.
Athletics New Zealand commercial and marketing manager Carl Jackson agreed, saying the not-for-profit organisation assisted 22,000 members and thousands more through schools and community events, but was reliant on funds from gaming trusts.
However, the Problem Gambling Foundation of New Zealand made a detailed, 30-page submission in support of a sinking lid policy in Dunedin.
In it, the foundation argued pokies were not a ''harmless product that a few weak-willed individuals need help with''.
''These machines are designed to addict and are doing significant harm,'' it warned.
That harm extended beyond the individual to their friends, families, workmates and others, and meant that as many as 500,000 people in New Zealand were affected in some way by problem gambling.
Pokies were the major cause of gambling harm in New Zealand, and were concentrated in low-income areas, but councils could make a difference by introducing sinking lid policies, the foundation said.
Already, 19 councils in New Zealand had taken that approach, and the foundation's submission called for Dunedin to follow suit.
The Southern Primary Health Organisation also backed a sinking lid policy, saying gambling was ''increasingly recognised'' as a cause of social harm affecting health, relationships, finances, employment and parenting.
Dunedin's pokies were found in higher concentrations in low income areas of the city - North and South Dunedin - and the city's gamblers spent more than $4.7 million in them during the three months to December last year.
That equated to $18 million in a year, the organisation noted.
In total, 71 submitters have said they want to speak to the subcommittee, comprising chairwoman Cr Kate Wilson, deputy mayor Chris Staynes and Cr Fliss Butcher.
The hearing begins on Wednesday and is scheduled to continue on Thursday, then break before concluding the following Monday.
