Minister for Finance Michael Ferguson said the new legislation was expected to generate nearly $1 billion in government revenue over a 20-year licence period with hotels and clubs retaining no less than 50 per cent of gross returns from gaming.

"The legislation will deliver the Tasmanian majority Liberal government's commitment to facilitate a sustainable gaming industry supporting freedom of choice, minimising harm, backing jobs and providing increased returns to fund government services," Mr Ferguson said.

"In line with our election commitment, the Future of Gaming in Tasmania policy ensures the returns from gaming will be shared appropriately between the industry and the government which represents the community."

The new policy will come into effect on July 1, 2023, and will end the monopoly of the Federal Group.

Hotels and clubs will be individually licensed for the operation of Electronic Gaming Machines.

The Federal Group will retain its casino licences but term, tax rates and licence fees are yet to be determined.

Other reforms include a decrease in the state-wide cap for EGMs of 150, increased funding for harm minimisation and two new high roller non-resident casino licences.

One high roller casino licence will be offered to MONA founder David Walsh in the South and a second licence will be made available in the North, including the North-West, of the state.

To view the consultation paper, visit the Department of Treasury's Liquor and Gaming website here.

All written submissions on the consultation paper must be received by 5pm on March 18, 2020.