When the Follett Labor government licensed Casinos Austria International to open a casino in Civic in the early 1990s (on land excised from Glebe Park) it was under the strict condition that it not operate poker machines on the premises. That licence stipulation, unique among Australia's casinos, was frequently challenged in the years following but never overturned. This was largely because allowing more poker machines in a city already saturated with them would have entailed significant public criticism for the government of the day. But it was also very much in Labor's interest to keep Canberra's pubs and clubs competition-free since it benefited financially from the sector, both directly and indirectly. Even when the taxation review headed by former ACT Labor treasurer Ted Quinlan recommended that Casino Canberra be allowed to install poker machines, the Gallagher government declined to accept.

Chief ministers come and go, however, and if his Labor predecessor gave the appearance of caring earnestly about long-standing policy commitments, Mr Barr's demeanour and rhetoric have always indicated he believes flexibility and a preparedness to compromise to be greater political virtues. Moreover, Labor has also come under significant internal pressure to reduce its dependence on gambling taxes and donations and indeed to cut its financial ties with the Labor Club group.

In such a climate, it was always likely that Aquis Entertainment, which bought out Casinos Austria International in 2014, would seek to overturn the poker-machine ban. The Hong-Kong company took the precaution of adding a sweetener, however: in return for the right to operate 500 machines, it would undertake a $330 million redevelopment of the facility, adding new dining, entertainment and retail facilities, as well as new gaming areas. This, it claimed, would bring "as many as" 750,000 additional visitors to Canberra, deliver more than 400 on-going jobs and raise "as much as" $60 million a year in additional tax revenue. And it made it clear that refusal would be a deal-breaker.

The pubs and clubs sector, not unexpectedly, condemned it, with Raiders Group CEO Simon Hawkins claiming that removing the ban would see clubs close. He also warned the Raiders would call a halt to a planned expansion of their Gungahlin club worth $18 million. Mr Barr, however, said there was no change in government policy "at this point", but "nor am I signalling a blanket 'no, we won't even consider what has been put forward'."

Duly aroused, the Raiders engaged lobbyist Richard Farmer; the Labor Group board passed a resolution that it would not sell machines to the casino under the Territory's buyback and trading scheme, and ClubsACT claimed the money it ploughed back locally in the form of jobs, infrastructure and grants to community groups, sports clubs and charities was at serious risk. If significant, however, that money was always going to pale in comparison to the $330 million promised by Aquis.

The compromise deal Mr Barr has offered to Aquis – 200 machines, the licences for which must be bought from the clubs, rates of tax and community donations higher than those set for the clubs, and more stringent harm minimisation measures – is a clever one which will placate critics. Poker machine numbers in the territory will fall by 67 – and with these being traded at around $18,000 each, many clubs will potentially enjoy a cash windfall. Moreover, Mr Barr has said that "only once work is complete ... would the casino be allowed to operate poker machines, assuming clubs want to sell them the licences".

Aquis's announcement on Friday that it expects to submit a revised redevelopment bid suggests it does not regard these conditions as onerous, or the clubs' opposition as insurmountable. The issue appears far from settled, however. ClubsACT will meet next week to discuss its response, and Mr Farmer has hinted the Raiders Group will pursue a grass-roots style campaign to protect the clubs' monopoly.

On that score, the government may be vulnerable. The revitalisation of a rundown part of the city jibes with Mr Barr's development-at-any cost mentality, but whether or not the Canberra community benefits from the creation of a gambling mecca remains a contestable argument.