South Australians pumped $38 million less into poker machines last year as increased financial pressure on households and the rise of online gambling cut into pokie revenue.
Punters still lost $680 million in the past financial year but this was down $112 million from its peak 10 years ago, a University of Adelaide report has found.
The slide is attributed to sluggish wage growth, the rise of online gambling apps and an increase in sports betting, Associate Professor Michael O'Neil says.
"The drop in poker machine gambling over the past financial year is the biggest we've seen in 10 years," Prof O'Neil said.
However, he said the decrease in spending on pokies did not necessarily mean problem gambling had reduced, with people simply turning to other forms of gambling.
Australian Hotels Association SA general manager Ian Horne acknowledges there are many options now for younger people looking to gamble other than pokies.
"Online gambling can be a whole range of things from sports betting on your phone, corporate bookmakers to legitimate casinos with online sites," Mr Horne said.
"I think it would be right to suggest that the significant uptake in online gambling, most research tells us, is focused predominantly on younger males."
The report noted the number of pokie machines in pubs and clubs was also down from its peak in 2003.
Mr Horne said bricks and mortar establishments would need to do more to entice people to go to pubs as opposed to simply downloading an app.
"They will have to look at new and innovative technology to make gambling where you physically go to a venue whether its a casino, hotel or club more inviting," he said.