Spending on gaming machines fell 5.2% last year, according to Department of Internal Affairs figures.
The department says there has also been a slight drop in the number of gaming machines, venues and licence holders.
Spending dropped from $912.6 million in 2008 to $865.5 million in 2009.
The number of licence holders fell 5% last year, from 399 to 378.
Venues dropped 3% to 1491 and gaming machines were also 3% down to 19,359.
The Charity Gaming Association says the fall will mean community projects get less money.
Chief executive Francis Wevers says there will be an increased requirement on community organisations to do some fundraising on their own, rather than receiving a grant for an entire project.
