The top 10 pubs for poker machine profit made $117 million. Credit:AFR Now, the Berejiklian government is preparing to honour another aspect of the Baird government MOU: a review of how applications for poker machine increases are considered, known as the Local Impact Assessment scheme. Broadly speaking the scheme ranks council areas by pokie density and socio-economic level. The idea is that this allows authorities to make decisions about whether or not to grant an increase in numbers based on whether or not there will be a benefit to the local community. More often than not, increases in pokie numbers are granted alongside promises by the club or pub to donate cash to local community organisations.

To critics it's a system that's inherently flawed, given the profits reaped by the venue from being granted the increase are always much larger than the community contributions, not to mention the potential harm to problem gamblers. As part of its review, Liquor and Gaming NSW has produced a discussion paper and is calling for submissions. Inside is data that should give the NSW government and its regulators pause for thought as they expose how pokie policy in NSW is failing dismally. The paper shows that between 2009 and March 7 this year, of 155 applications for a pokie increase in NSW venues, 133 were approved, eight refused and 15 withdrawn before a decision was made. That's an approval rate of 85 per cent. The paper notes that during 2015-16, $1.26 million in "donations" were made by venues as part of the approval process.

Under NSW law, when pokies are transferred between venues or sold, for every block of two or three pokies one must be forfeited to the state. This is designed to gradually reduce the number of poker machines in NSW, the undisputed pokie capital of Australia. The paper shows that at March 7 this year, there were 95,071 pokie entitlements in NSW, down from 100,284 in 2009-10. That's a decrease of 5213 since the LIA scheme was introduced, or 5.2 percent. But compare it with data not contained in the discussion paper about the extraordinary surge in pokie profits over the past couple of years. Last financial year gamblers pushed $80 billion through NSW pokies, up from $73 billion in 2014-15 – an increase of 9.5 per cent. In 2013-14 revenue was $68.9 billion, putting the increase from that year at 5.9 per cent. So while machine numbers are falling slowly, the amount spent on them and the profits of clubs and pubs are increasing significantly faster.

The government has previously put this down to NSW's growing economy and population. The MOU signed by Baird and then Nationals leader Andrew Stoner commits the Coalition to "review the Local Impact Assessment process to ensure it is meeting community and industry needs". It stipulates the review will "explore the option of introducing leasing arrangements in the LIA scheme if it can be shown that there is a net community benefit achieved". Curiously, this is not in the discussion paper, but it raises the question: if pokie leasing is allowed, would the forfeiture rule apply? The nature of the review raises a couple of other questions for the Berejiklian government and in particular racing minister Paul Toole, who has responsibility for gambling policy. The first is whether its findings will ever be publicly released. At the moment the government is still sitting, after 18 months, on a $263,000 report commissioned from the University of Sydney exploring the various types of gambling in NSW and the harm they cause.

The second and bigger question is what relative weight will be given to the interests of the community and the industry? After all, the government has only signed an MOU with one of them. Sean Nicholls is state political editor.