Sex workers in Tasmania may be required to formally register in the future, and it is likely they will lose their fight to have brothels legalised.
Attorney-General David Bartlett will soon release a discussion paper on the current laws, which allow sex workers to work from home alone or with one other sex worker.
Last year's review found that those working within the industry and opponents of the industry were unhappy with the legislation.
Mr Bartlett said that while he understood the argument that sex workers could be afforded better protection by working in groups, his priority when considering legal changes was the protection of vulnerable people.
"My personal view is if you want to protect the vulnerable ... you want to reduce the demand for services," he said.
"It's difficult for me to see where brothels fit into reducing demand but I also can see the argument that brothels can offer a level of protection for vulnerable people working in the industry.
"I ... have to balance that with a view, a strong view of mine is that if we want to reduce demand for the sex industry in Tasmania ... a proliferation of legal brothels I don't think achieves that."
Mr Bartlett said the most obvious vulnerable people potentially involved in the sex industry were children and those coerced into the industry who found it difficult to exit.
The case of a 12-year-old girl prostituted in Hobart by her mother and her mother's partner - both of whom were jailed as a result - highlighted a significant problem with the current laws, Mr Bartlett said.
"If you look at the marketing of sex services in Tasmania, it was too easy for people who wanted to prostitute a 12-year-old girl to market that service and provide that service," he said.
Mr Bartlett is considering registration of sex workers - something the national sex workers association, the Scarlet Alliance, opposes because of the potential for discrimination.
"I can understand arguments against but I can also see strong arguments for registration of sex workers when it comes to the marketing of sex services because in theory unless you've got a registration number, you can't market a service.
"That ... could be a deterrent or at least an obstacle to overcome for people who want to exploit the vulnerable," he said.