The state has one poker machine for every 95 people, compared with one for every 109 people in Queensland and one per 227 people in Victoria, Unions NSW says.
"NSW has too many pokies, pure and simple, and we need to start the process of winding them back," secretary Mark Morey said.
Completely banning pokies was unrealistic, but at least 25,000 should be phased out over the next five years, the union body acknowledged in a resolution on gambling reform passed at Thursday's annual general meeting.
The proposed figure would represent nearly 29 per cent of the more than 87,000 poker machines in operation in NSW.
The state government should reduce the number of machines through a moratorium on new licences for pubs and clubs and removal of existing licences when clubs close or try to relocate them, Unions NSW said.
"The brutal truth about poker machines is that supply creates demand, and in turn, misery," Mr Morey said.
Compensation for the removal of licences should be available but minimal given historical profits of the machines, Unions NSW said.
Workers in venues where gambling occurs should receive training on associated harms, the organisation said.
It also called on the federal government to implement recommendations from a standing committee on social policy calling for bans on online gambling inducements and advertising.
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