Chief executive Nicholas Darias said installing new technology would cause costs to rise and job cuts were possible because of the reforms’ impact on revenue.

“The club is very concerned that this policy will seriously decrease revenue and the club may be forced to restructure, with job cuts a possibility,” he said in a statement.

“Additionally, the club may not be able to continue our support and sponsorship of local sporting clubs.”

Mrs Markus said the proposed reforms represented one of the most “significant challenges facing local communities, especially those in the Blue Mountains”.

“I acknowledge that gambling is a major problem for some Australians and, together with my coalition colleagues, I am committed to closely examining the recommendations of the Productivity Commission,” she said in a statement.

“In the federal seat of Macquarie, incorporating the Blue Mountains and the Hawkesbury, there are 21 clubs employing over 500 people on a full time, part time, or casual basis.

“These clubs donated over $5 million worth of support to local charities and recreational groups last year alone and have over 60,000 members locally.

“Reforms to poker machine legislation proposed by the Gillard Government as part of the deal made with Independent MP Andrew Wilkie to form government will have a huge impact on all clubs within the Blue Mountains, clubs that provide valuable community services.

“The cost of installing new technology may result in the closure of many small clubs with large clubs reviewing their community activities.

“Families will be hit hard and our young people may miss out on sport and social opportunities.”