Western Australia's Racing and Gaming Minister has come under fire from one of his Government colleagues over suggestions electronic gaming machine rights could be included in a potential TAB sale.

Key points: WA Government wants to privatise the TAB

WA Government wants to privatise the TAB Gaming machines could be allowed at country pubs and TAB outlets as part of the TAB sale

Gaming machines could be allowed at country pubs and TAB outlets as part of the TAB sale Minister says current policy is a good one

The possible expansion of gaming options as part of the potential sale of the TAB has alarmed social welfare advocates as well as Government backbenchers.

The Barnett Government has been investigating the sale of the state-owned betting agency for the past two years, as it seeks to bring down public debt.

Racing and Gaming Minister Colin Holt has confirmed a potential buyer could also seek to gain the rights to operate gaming machines as part of a deal.

"I think what we're saying here is any potential buyer, who may be operating in other states and have that ability, might want to come to Government with a proposal that does that," he said.

"And when that proposal comes we need to consider whatever they're proposing in terms of what the outcomes are for us as a community.

"And also what it delivers for the industry on the back of a potential sale."

Under current law only Crown Casino has the right to operate such machines in Western Australia.

TAB sale could create 'mini-casinos'

Liberal MP Murray Cowper has long opposed any sale of the TAB, and said Mr Holt was not listening to the racing industry.

"He's got a select group that he's listening too. But the vast majority overwhelmingly do not want to see the sale of the TAB," Mr Cowper said.

"And [they] certainly don't want to see any sweeteners of running some sort of gaming machines and having these mini-casinos all over Western Australia.

"I'm wondering whether or not the National Party have given the Minister, for the South West by the way, the imprimatur to go out and negotiate on behalf of Government to sell off the TAB, and in part of the deal as a sweetener, bring in pokie machines. I just think it's a pail too far."

WA Opposition Leader Mark McGowan has accused the Government of trying to open the door to poker machines in WA.

"I'm sure the Government is examining all options so they can flog off the TAB and increase its value," he said.

"So I'm saying to the Government, close the door on this, slam the door shut, bolt it closed, and never open it again."

Country pubs could get gaming machines

Mr Holt was adamant no proposal had yet been put to Government, but the ABC understands any potential buyer of the TAB could seek to operate Keno machines in TAB outlets and country pubs, as well as virtual horse racing games known as Trackside.

The Minister said any discussions along those lines would also need to include Crown Casinos.

"I am sure at the moment they see themselves as the holder of those licences and would be pretty keen to retain them," he said.

But he said even without such a proposal, the TAB would still be an attractive asset to potential buyers.

Racing and Gaming minister Colin Holt told cabinet a buyer for the TAB could seek right to operate gaming machines. ( ABC News: Andrew O'Connor )

"It's still a very well-run business and I think other operators in other states see it as a well-run business," he said.

"And that's why they're interested in it. It may not be about product expansion it may be just about what they do now.

The Barnett Government has historically opposed any expansion of gambling in Western Australia, and Mr Holt admitted any decision to allow a private operator to run gaming machines outside current arrangements would represent a major policy shift.

"I think that's a really good policy that this community celebrates," Mr Holt.

"We've got the lowest gambling rates in the nation. And one of the reasons is it's destination gaming machines only.

"And I think it would be a massive policy shift to move away from that."

Cabinet proposal withdrawn

But he did not rule out such a move if it was presented as part of a purchase proposal from a private operator.

"I think it's one of the things you consider. But again those discussions need to be had. And we'll talk about it when the time's right," he said.

The ABC has confirmed a submission on the sale of the TAB was set to go to today's Cabinet meeting, but was withdrawn at the 11th hour.

Mr Holt released a statement after the Cabinet meeting, saying the Government had no intention of including gaming machine rights in the sale of the TAB.

The statement said any testing of the market in relation to the sale would take into consideration business models to "upgrade offerings in TAB retail outlets", but would also take into account potential social impact of such changes.