The NSW government today signed a memorandum of understanding with the Tatts Group which has agreed not to pursue large supermarket chains as lottery outlets.

The government has also announced it will assist lottery agents with their point of sales upgrades with grants of up to $10,000.

But owner of Gunnedah Newagencies John Sturgess said he believed there were still significant concerns.

"All this is doing is deferring them going into supermarkets," he said.

But the memorandum  does allow NSW Lotteries to expand into petrol stations, many of which are owned by Coles and Woolworths, "if it deems fit".

Mr Sturgess said he was not yet sure of the cost of the necessary fit-out, but it could be twice the amount offered under the grants.

Member for Tamworth Kevin Anderson  welcomed the support package.

Mr Anderson said local newsagents had been facing an uncertain future regarding the sale of lottery tickets due to the expiry of the five-year cap that stated lottery tickets could be sold only at newsagencies, convenience stores or other retail businesses, not major supermarket chains like Coles and Woolworths.

“That cap was due to expire on March 31 and there was the threat of the Tatts Group allowing tickets to be sold at Coles and Woolworths which would have had a devastating effect on our newsagents,’ Mr Anderson said.

“The Tatts Group was also demanding that lottery agents upgrade their point of sale at the business owner’s expense, this was also a major concern. 

He said he had recently held a meeting with local newsagents, and the Minister for Small Business, John Barilaro, in Tamworth to discuss the newsagents’ concerns.

“This package will protect our local newsagents for a further three years and allow them to grow their businesses," Mr Anderson said.

“The retail sector is a very important part of local business and I am keen to ensure that it stays strong in our regional centres in the Tamworth electorate."