"We had speakers come in and speak about how restrictive the industry is, but to me that is just putting lipstick on a pig," Cr Hamilton said.
"Council was very passionate about trying to amend the alcohol licensing because they realised the harm, but when it comes to this everyone is so split."
Councillor Dave Macpherson backed Cr Hamilton and said the gambling industry lobbies heavily to protect their own patch.
"It is why they are here with senior lawyers presenting their case," Cr Macpherson said.
Councillor Macpherson said pokies machines have been acknowledged as the most addictive form of gambling.
"For every problem gambler, there are sometimes tens of others in a family who are affected."
He said the new policy would minimise harm further.
"Only 42 per cent goes back out into the community. If they are so concerned for the reducing amount of money going into the community then why don't they increase the proportion."
Councillor Angela O'Leary respected Cr Macpherson's stance on the matter, but that she had to think about the community.
"The fight for those community organisations has never been tougher," Cr O'Leary said.
"The world has changed, fundraising has become a business."
Councillor Geoff Taylor said he could not understand why council would not allow relocation.
"Most of the gambling expenditure is going into all the other forms such as race gambling and Lotto," Cr Taylor said.
"We are grabbing the one that is most accessible and dealing with it, and I accept that, but these extra controls go a step further, to me it goes past a point of reasonableness.
Councillor Garry Mallett said people have every right to spend their money however they choose.
"If they decide to spend their money on pokie machines, it is up to them and they suffer the consequences," Cr Mallett said.
Mayor Andrew King, Deputy Mayor Martin Gallagher and councillors Hamilton and Macpherson voted in favour of the changes to the policy.
Councillors Paula Southgate, Siggi Henry, Rob Pascoe, Leo Tooman, James Casson, Mark Bunting, O'Leary, Mallett and Taylor voted against the changes.
The policy will be reviewed before the 2019 local election.