The small Victorian town of Romsey has won its fight against the poker machines that were destined for the town's only pub.

The Romsey Hotel won a licence for 30 poker machines but locals fought the decision all the way to the state's highest court, arguing that poker machines would harm the town.

Nestled in the Macedon Ranges 50 minutes north of Melbourne, Romsey is a laid back, quiet town and locals want to keep it that way.

Their local pub was given the green light for 30 poker machines, but the community revolted, worried they would drain money from young families and businesses.

Since poker machines were first introduced in Victoria, local opposition to stop them has often proved futile, but the Romsey community won the support of Victoria's Court of Appeal that ruled in March last year VCAT was wrong to ignore community opposition.

Today, VCAT president Justice Kevin Bell ruled any economic benefit of the machines would be far outweighed by their negative social impact.

"On the negative side there is the money which will go out of the town - about $2.1 million per annum - of which about 80 per cent will be from new gaming expenditure and the adverse effect on local businesses," he said.

Residents elated

Sue Kirkegard is a Romsey resident who has helped spearhead the town's five-year fight against the poker machines.

She says her neighbours will be thrilled with today's decision.

"So many different people in town used to talk over coffee shops and down the street and at the supermarkets that they really didn't want the glitzy poker machines expenditure and activity in the town," she said.

"It's a fairly hard working, ordinary town, but it's a small town and people do have a bit of care for how life affects each other, still not the big city kind of image."

She says 30 poker machines would have had a big impact on the town.

"Thirty is a lot for a town the size of Romsey. Romsey's a country town, you go for walks and you go outside and you go for meals and at night it's quiet - there's no bright lights at midnight," she said.

Ms Kirkegard says the decision should offer hope to other local communities fighting against big business.

"It is ordinary people who really don't have much to do with courts and that sort of thing," she said.

"Ordinary people, whether they have a say in what happens in their local area, how do they do that in relationship to gaming, that's never been worked through except for this legislation."

People gambling anyway

But the owner of the Romsey Hotel, Jim Hogan, says today's decision will hurt local tourism and business.

"It was part of an overall development, a $5 million development which would have created approximately 30 full time employees, would've extended the hotel, including cafes, restaurants, motel, function room," he said.

Now, he says, that development cannot go ahead. He says people will gamble anyway, just not at his pub.

"It's integral, you know, so unfortunately I feel sorry for the population of Romsey the fact that those development dollars will be going to other hotels in the group," he said.

"They're gambling anyway. My opponents have acknowledged that Romsey people, they gamble at one of my other venues at Wallan which isn't far away... so the money is being spent and it's being outside the town."

Mr Hogan says 65 per cent of the town supported his hotel's redevelopment application.

He says it is strange for planning approvals to be decided on a popularity basis and says it holds massive implications for the gaming industry.

"It certainly calls into question the State Government's 2012 gaming legislation. There'll be no new entrants into the market," he said.

"It makes existing gaming venues monopolies in their area; it makes them a lot more valuable.

"How the Government addresses that I'm not sure. It's got implications I think to liquor and planning where residents can run a survey and oppose it on feelings of unhappiness."