A proposed Australian sports lottery has been criticised by the Australian Lottery and Newsagents Association.
Federal Sports Minister Greg Hunt has started discussions over a lottery that would be used as a means to address a funding shortfall in Australian sports.
The lottery would help fund elite and grassroots sport and help address the decline in Australia’s performance in recent Olympic Games.
But critics are concerned a sports lottery would clash with existing versions which provide $1.6 billion in taxes to state and territory governments each year.
There are major concerns that funding to hospitals, schools, charities and small businesses could be eroded if a sports lottery is set up.
"We don't believe the government has completed proper due diligence on this proposal and our members remain concerned that unfortunately this is a very big thought bubble," said the Australian Lottery and Newsagents Association's Ben Kearney.
"It is apparent that adequate work on the detail hasn't been done, when there are licensed, regulated operators in place and when this could have an unreasonable impact on small businesses and state governments."
Four thousand small businesses and their 20,000 employees across the country could suffer from cuts if the funding is taken away, according to the association.
A spokesman for Mr Hunt welcomed the association’s contribution.
"The minister welcomes all contributions on this topic, which is precisely why we sought public comment and submissions," he said.
"Our goal for any lottery is to benefit Australian sport and increase participation."
The UK has seen a dramatic improvement in its Olympic performance with the lottery funding and Hunt would like to see a similar model in Australia.
"It's something that in my time and on my watch I would like to see us achieve," he said. "If it is legislated and highly regulated, and it's a public good lottery then that's sensible."
Submissions to the Turnbull government's National Sports Plan close this week.