Revenue from gaming machines in pubs and other venues fell 5.7% over the year to the end of June compared with the previous year, Department of Internal Affairs figures show.
The Charity Gaming Association says this equates to a $16 million decline in the grant money available for community activities.
It says revenue for each quarter of the past financial year has shown significant declines on the same period in the previous year.
The association says the situation has been exacerbated by the spending of $60 million to comply with Government requirements for player information displays on gaming machines.
