New South Wales' gambling landscape is set to be overhauled, with a cap on new pokies in several areas and huge fine increases for badly behaved online bookies.

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Sydney's west was identified as a problem gambling hotspot, and the Berejiklian Government today announced no new poker machine licences would be granted a huge swathe of suburbs including Fairfield, Granville and Auburn.

In total, about 20 per cent of NSW will be banned from having new machines.

Meanwhile, online gambling companies that treat fines "as a normal cost in running a business" will face a tenfold increase to penalties from $5,000 to $55,000.

Last year, an agreement between federal, state and territory governments outlawed online bookmakers making inducements like bonus bets and money-back offers when gamblers lose.

The changes to online betting were made in response to a wave of wagering outlets entering the Australian market, both locally and overseas-based, including companies such as Sportsbet, CrownBet, Ladbrokes and Bet365.

No new pokies in problem areas

NSW Gaming and Racing Minister Paul Toole said problem gambling areas would now be a "no-go zone" for new poker machines.

A weighting system is used when deciding where new poker machines can be placed, and under the new regulations, a greater weight will be given to socio-economic factors.

"In the past socio-economic factors were at 33 per cent weighting, today it is going to be 70 per cent weighting," Mr Toole said.

Paul Toole said the laws to not unfairly target poorer suburbs. ( AAP: Stefanie Menezes )

He said Australian Bureau of Statistics data would be used in the decision-making process.

"It looks at the income of those communities, it looks at unemployment — these are the factors that we need to consider when any application is being put forward for additional gaming machines in an area."

He denied the move unfairly targeted poorer suburbs.

"I think this is a balance approach in trying to address the concerns put forward by the community," Mr Toole said.

Fairfield has more machines than Tasmania

Greens MP Justin Field said suburbs plagued by problem gambling needed a dramatic reduction in poker machines, not a cap.

"The impacts are just too great," he said.

"The Government needs to commit to reducing the number of machines."

The Alliance for Gambling Reform said council areas like Fairfield already have more machines than the whole of Tasmania.

"It's a very disappointing package of changes, tinkering at the edges," Stephen Mayne said.

Dr Sally Gainsbury, deputy director of the Gambling Treatment and Research Clinic at the University of Sydney, said advertising had an impact on problem gamblers.

"Most people say they are not particularly affected, but those most likely to be influenced to open new accounts or take up free bet offers are those least likely to be able to afford it," she said.

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Dr Gainsbury said the "good character" test could also come into play for licence holders.

"A lot of these companies are based interstate, especially the Northern Territory and overseas, including the UK," she said.

"If the NSW Government and other states let the local regulatory authority know about any breaches, it might affect a company's ability to get their gambling licence renewed."

The peak Australian online wagering body Responsible Wagering Australia has been contacted for comment.