The Royal Hotel has applied to the Victorian gaming regulator to lift its number of poker machines to 30 as part of a $300,000 upgrade to create a “family orientated destination”.

A planning application states the machines would be operational from August 2012 but the hotel did not expect them to increase problem gambling.

But Benalla Council is seeking community feedback after expressing concern the plan would reduce the viability of local businesses and increase the risk of social harm.

Acting mayor Peter Dunn said up to $312,000 a year would be fed to the machines, at least half expected to come from first-time gamblers.

Cr Dunn said Benalla already had 95 poker machines and a greater ratio of machines per head of population than the state average.

“Council recognises that for many people gaming is a bit of a flutter and fun while out with friends or family, but for others it sees basic needs such as putting food on the table being neglected,” he said.

Cr Dunn said the average annual spend on gaming machines in Benalla — which is ranked the 16th most disadvantaged shire — was $492, compared with $373 in Wangaratta.

“Benalla has a very high spend on poker machines so council is interested to know whether or not people are concerned about this and whether more poker machines will mean less money going to the other venues.

“Some people are spending a lot of money on these things and that’s their right, I don’t want to be a nanny state, but often it’s the people who can least afford it that are playing poker machines.”

The Royal Hotel previously operated 30 poker machines until Tabcorp reallocated machines across venues in June 2006, removing 10 from the venue.

The hotel hopes the new machines will make it “more competitive” with the Benalla Bowls Club, which is located just 300 metres away and has 50 poker machines.

The hotel said it did not expect “any significant increase in patronage” as a result of the extra machines, additional revenue would allow it to significantly increase community contributions.

“There will be a minimal, if any, change in problem gambling,” the application states.

Residents can have their say on the proposal until Monday.