Operators of pokie machines are facing a major increase in their fees.

The government is imposing a 336 percent fee increase for new class four operating licenses - they'll now cost almost $16,000.

The cost of new venue licenses are going up 184 percent to more than $2500.

The fee hikes are to cover a growing deficit on the Government's gambling sector regulator's books.

Internal Affairs Minister Peter Dunne is not expecting a warm reaction from pokie operators.

"It's not going to be warm and friendly. But I think that they understand that the prospect for dialogue, which we've begun between the sector and the regulator, on the nature of the industry for the future provides the best hope for getting something viable moving forward," Dunne said.

A growth in online gambling is also being looked into by the Government as it looks at potential new ways to regulate the industry.

With a decline in the number of pokie machines and their cash contribution to the community continuing, attention is now being focused on their main competitor - online gambling.

Dunne said it's a question of how to best make the sector fit for purpose, protect returns to the community, and ensure the system is fair.

"There are issues here though in terms of the nature of the games, their impact and their spread, and how they stack alongside, if you like, a person operating a series of machines at a venue in New Zealand."