DAREBIN Council's decision to greenlight a pokies application for a Preston pub has been overturned in a landmark decision.

In September, Preston resident Susan Rennie mounted a VCAT challenge against Stolberg Beer Cafe's bid to install 30 poker machines.

Stolberg applied for and was granted a planning permit for the pokies by a council planning officer, acting under delegation.

Last month, VCAT handed down a decision overruling the officer's decision and knocking back Stolberg's bid. VCAT found the "social and economic impact" of installing more poker machines in Preston, a "disadvantaged" suburb already "saturated" with pokies in pubs, was inappropriate. Darebin has 986 poker machines, significantly more than the state average, and Preston has almost double the state's per-capita average.

Ms Rennie said Stolberg was close to community services and public housing. "I could not imagine a worse location to put pokies, in terms of the high exposure to very vulnerable people," she said.

It is the first time a challenge against a planning permit for pokies has been refused due to social impact.

Ms Rennie said she was "delighted and surprised" by VCAT's decision and hoped it would encourage activism in others.

Darebin councillor Trent McCarthy welcomed the decision but called on the state government to legislate the location of poker machines. "It shouldn't be left up to courageous individuals or councils to fight these battles," Cr McCarthy said. "The planning scheme should protect our community from an excessive number of pokies."

Darebin Council intends to oppose Stolberg's application for a gaming licence and resolved that all future pokies applications would be considered by the planning committee.

The Victorian Commission for Gaming Regulation will hear Stolberg's application later this year. Stolberg owner Ray Steit was unable for comment at time of press.