The Flying Horse Bar and Brewery will apply to the city council for a planning permit to operate eight electronic gambling machines from mid next year.

Hotel co-owner Graeme Rodger told The Standard there was customer demand for pokies in the eastern sector.

"We dont't see this as having a huge impact because the number is under the city's official cap of gaming machines," he said.

"There are a lot of tourists and locals who have asked for them.

"It won't be a dedicated pokies venue. just a section where people can have a flutter.

"We'll put them in what is now the gallery storeroom and it will supplement our existing TAB facilities.

"A planning application will be sent in the next three weeks and if approved we'll go and buy the machines."

His announcement follows earlier plans by two Melbourne-based entrepreneurs to remodel Raffertys Tavern in west Warrnambool into a restaurant conference centre with 19 pokies.

That application is before the council and is subject to public comment.

The gaming machine entitlements for both venues were purchased in a hotly contested public auction process last year at which prices paid for Warrnambool licences were among the highest in Victoria. Private operators paid $130,500 for each entitlement.

Mr Rodger's family company also purchased 30 entitlements in Moyne Shire for only $33,350 each, but has been stifled by stiff anti-pokies stance by the shire council and community.

He has revealed the entitlements are on the market and if they don't sell the company would consider purchasing a metropolitan hotel to operate pokies.