In June a select committee recommended the bill be passed into law with significant amendments.
Mr Flavell originally wanted 80 per cent of the proceeds from pokie machines to go back to the community they come from.
National's changes mean instead of requiring 80 per cent of pokie profits to go back into the community, the Government will be able to set an unspecified minimum percentage by way of regulation.
National also baulked at a provision allowing local councils to reduce or ban pokies in areas where disadvantage and problem gambling were major issues. Instead, National will allow operators to move their machines to another venue.
Mr Flavell said he was standing by his decision not to withdraw the bill.
"This bill does not live up to the idea we all had - although I've chosen not to walk away. My approach to political reform is to chisel away bit by bit, persevere and do the work necessary to achieve change, no matter how incremental.''
New Zealanders lose $2 billion a year on gambling, Mr Flavell said.
"Should we ignore that reality? Should we walk from this bill in principle? The Maori Party says 'no','' Mr Flavell told Parliament.
"weren't able to achieve what we wanted with this bill? The Maori Party says 'no'.
"We are not bailing out. We have gained some ground.''
Salvation Army social policy research and parliamentary affairs unit director Major Campbell Roberts said the proposed changes did nothing for problem gamblers, those at risk or communities wishing to manage the impact of gambling.
"It fails to address the fundamental flaws in the current system which have resulted in a long history of rorts, money flowing out of poor communities, and excessive cost claims.''
The committee considered and received nearly 35,000 submissions, of which 159 were heard by the committee.
Problem gambling groups have said the bill now does little to minimise the harm caused by gambling and have called on it to be withdrawn.
National MP Sam Lotu-liga said under a National Government the number of pokie machines around the country had reduced by 550.
He believed the bill would be a step in minimising the harm caused by gambling.
Green MP Denise Roche said the bill should be withdrawn.
She said the bill now did nothing it had set out to do, and the pokie trusts had "won''.
