"(Gambling has) spread like a cancer across Queensland, so what we are doing now is we have got lots of mini problems," McLindon told a tourism futures conference, according to the public broadcaster ABC.

SYDNEY (AFP) – An Australian lawmaker  has stirred controversy with a proposal to establish a gambling hub at the gateway to the Great Barrier Reef in a bid to address widespread problem betting in the community.

Independent Queensland MP Aidan McLindon said relocating all the state's gaming machines to an "AusVegas" in the popular city of Cairns would help address chronic gambling in the community while providing a boost to tourism.

"(Gambling has) spread like a cancer across Queensland, so what we are doing now is we have got lots of mini problems," McLindon told a tourism futures conference, according to the public broadcaster ABC.

"If we centralised it, it would certainly offer (a place where) people can go away, blow their money, have a holiday and then come back to reality."

Cairns mayor Val Schier rejected the proposal as bizarre and tacky, saying it would do more harm than good. "It is not something that Cairns would ever want to be a part of," said Schier.

"Cairns has fantastic natural attractions and that is what will bring people to this region, not some tinseltown, artificially-created product."

But McLindon said the proposal would benefit "all the key stakeholders" and denied it would create a "sin city".

"I certainly wouldn't want to see it with elements of the sleazy you see in Las Vegas," said McLindon, suggesting that including some theme parks would ensure it was "family friendly".

"I think it is important too for the Cairns region to have a balance between the Great Barrier Reef and the tropics," he added.

Officials last month recommended the country's popular "pokie" slot machines -- a staple of pubs nationwide -- should be limited to one dollar per bet to help curb problem gambling which is estimated to have an enormous social cost.

The Productivity Commission said Australians' gambling losses totalled more than 19 billion dollars (16.5 billion US) in 2008-2009, with each player about 1,500 dollars (1,300 US) out of pocket every year.

The commission said some 600,000 Australians -- four percent of the adult population -- play pokies at least weekly, with about 95,000 classed as problem gamblers. Maximum bet limits are currently set at five or 10 dollars.