Mac's Hotel owner Peter "Cork" Walsh said a range of safeguards had been put in place during recent years, including self-exclusion, which aimed to better protect gamblers.

He said the vast majority of people played poker machine without getting into financial difficulties.

"It's generally a bit of enjoyment and fun," he said.

"We don't see heavy gamblers. I do not believe playing poker machines are destroying people's lives.

"That may happen in Melbourne but it's not happening here. Gambling here is generally a bit of enjoyment."

Mr Walsh said he had poker machines in his venue for 25 years and currently had 31 machines.

"I don’t see people get in real trouble. I could name a handful," he said.

"I've just signed up for another 20 years. Poker machines are not going away any time soon.

"We've all just made a commitment to make payments and there's no doubt poker machines provide significant income for the State Government."

Mr Walsh said Warrnambool hotels and clubs had been paying about $130,000 annually for each machine while other areas of the state had been paying as little as $30,000 a machine.

"In Warrnambool that has been reduced by at least 50 per cent through the new deal. We were paying overs and it's now back to $50,000 or $60,000," he said.

"It's based pro-rata on turnover. The better and bigger the venue the more you pay. In Warrnambool there are just over 260 machines.”

South West Coast Greens candidate Tom Campbell backed the plan to phase out poker machines from pubs and clubs.

He said it was an incredibly important reform that was well overdue.

“Both Labor and Liberal governments have been addicted to poker machine revenue for way too long,” he said.

“This policy initiative is one everyone should get behind,” he said. 

South-west gamblers lost more than $28.5 million to the region’s poker machines in the past financial year, figures show.

Victorian Greens leader Samantha Ratnam announced the policy, saying the machines were destroying lives.

"Refusing to take action against pokies is costing lives," she said.

"The harm they cause forces people into debt, ruins relationships and results in spiralling mental health issues."

Under the plan, the 20-year licence extension would be repealed, a one-off licence would run from 2022 until 2028 and then there would be no new licences issued.

Ms Ratnam said councils would have power to decide whether to grant new licences to pokies operators in their areas or remove them from 2022 altogether.

The party would also introduce a $200 million compensation fund that would provide business advice and grants for clubs to provide services like gyms and music nights, as well as financial incentives for venues that voluntarily cancel licences before 2028.

But the Greens also planned to introduce $1 bets and $20 load limits in a bid to limit harm.

Premier Daniel Andrews defended poker machines.

"Electronic gaming is a perfectly legitimate form of recreational activity, save for a small percentage of the community who have a gambling problem," he said.

"We are providing support and assistance for those small number of Victorians in absolute record terms and we're proud to continue to do that."

Mr Andrews added he would not be doing any deal with Greens before the November 24 state election.

Victorians lost nearly $2.7 billion on poker machines in the last financial year on the state's 26,384 machines.

Those losses generated $1.1 billion in taxes for the Victorian Government.