The Department of Internal Affairs has lost a three-year legal battle to prevent gamblers playing gaming machines in the smoking area of a Wellington tavern.
Since 2007, the department has tried to add a special condition to the Kilbirnie Tavern's gambling licence that would stop people playing the machines in areas where smoking is permitted.
The department says smoking and playing pokies encourages problem gambling.
The Gambling Commission has allowed an appeal by gaming machine operator Lion Foundation against the condition Internal Affairs wanted to impose.
The Kilbirnie Tavern is one of seven pokie venues in New Zealand where gambling machines are played in smoking areas.
