Councillor David Bennett said the argument pokies were needed to support community groups was "completely without value".
Philippa Baker-Hogan said "there's a whole lot more money lost than what is granted".
"And we do pay for it. We pay for it in a whole lot of ways."
The evidence showed less money was being put into pokies as the number of machines fell," councillor Helen Craig argued.
"I can't support in any way sports clubs and any other organisation getting funding from effectively making other people really poor."
The two who voted against the policy - councillors Graeme Young and Charlie Anderson
said it would not make a difference.
"What I would like to be convinced of is that if there has been a reduction in machines, that there has been a reduction in problem gambling," Mr Young said.
"If we can't produce those figures then we are guessing a wee bit. A lot of institutions in Whanganui are benefiting from them, please don't forget that."
Mr Anderson argued problem gamblers would still find gaming machines even with a reduced number.
"We're not the social conscience of the whole world. It's the minority that have got the problem, we haven't got the problem," he said.
"Everything we do is about the minority... it's about the majority, surely."
The policy also allows for only one standalone TAB venue in Whanganui and sets out conditions for relocation of existing venues which have gaming machines.
