A landmark report into the harm caused by gambling in NSW has recommended banning a controversial feature of poker machines known as "losses disguised as wins", blamed by experts for fuelling addiction.

The state government has been sitting on the report and its recommendations for two years, including while James Packer's Crown and poker machine giant Aristocrat fight a court challenge in which it is alleged the feature is "misleading and deceptive".

Racing minister Paul Toole now says it will consider the recommendation as part of a broader review of prohibited features on poker machines in NSW.

The report, by the University of Sydney gambling treatment clinic, was commissioned in 2013 by the Office of Liquor, Gaming and Racing and delivered to the government in 2015.