Gambling and alcohol money to target anti-pokies senator Nick Xenophon, Greens

Well-placed sources have confirmed the Australian Hotels Association is supporting the major parties with a particular focus on opposing the popular Senator Xenophon and his team in South Australia and the Greens in vulnerable seats across the country.

Senator Xenophon – who has built a political empire from his roots as an anti-pokies campaigner – is tipped to win as many as three Senate seats and is a chance in two lower house seats in South Australia. The major parties are increasingly alarmed at the prospect of him holding the Senate balance of power with the Greens in the next Parliament.

The Greens are hoping to have more senators elected but are also campaigning hard for Coalition and Labor lower house seats; they are a real threat in particular in Batman in Melbourne's north, currently held by Labor's embattled David Feeney.

While the AHA is ostensibly a liquor industry lobby, the importance of poker machines to many Australian hotels has prompted the association to take a lead role over many years in the fight against tighter pokie regulation.

One senior AHA figure told Fairfax Media that the association wanted a "two-horse race" in Australian politics and that both Senator Xenophon and the Greens were hostile to the industry's interests; their defeat is the top priority for AHA campaign funding.

So too will the association break with tradition and leave election campaign decisions to its national body, based in Canberra, a move likely to allow a more strategic focus in its support for the big parties.

The association is one of the country's largest donors, pouring millions of dollars into the coffers of the ALP and Coalition parties over the past decade. It has shown a disproportionate interest in Senator Xenophon's home state of South Australia.

Australian Electoral Commission records show that in financial year 2013-2014, when the last election was held, the AHA South Australian branch spent almost $140,000 on the major parties, almost exactly same amount as its equivalent in pokie-friendly NSW which has more than four times the population. The South Australian branch of the AHA contributed almost $750,000 to the major parties between 2006 and 2015.

Senator Xenophon said he was happy the gaming lobby would provide a boost to advertising and media in his home state.

"They've been gunning for me since 1997. But this election they are getting out the cannons and the missiles," he said. "But people will see through this. No amount of anti-Xenophon advertising will hide the damage that pokies have done to the community."

The AHA sometimes earmarks its donations for particular candidates. In 2015 Fairfax Media revealed how the association gave tens of thousands of dollars to the local fundraising body that supported Tony Abbott frontbencher Kevin Andrews as he oversaw development of the Coalition's gambling policy ahead of the 2013 election.

An AHA source also confirmed the association sometimes provides "in kind" support to candidates, including through the funding of electoral research.

In 2012 the Gillard government introduced changes opposed by the industry, including a trial of mandatory pre-commitment technology in the ACT – a watered-down version of regulation demanded by independent Tasmanian MP Andrew Wilkie in return for his support in the then hung Parliament.

But the Abbott government passed a bill, introduced by Mr Andrews and supported by Labor, that repealed the Gillard/Rudd pokie reforms.

Mr Wilkie said he attributed the abandonment of the pokie reforms, and Labor's backing of it, to the power of the industry's donations.

News of the AHA campaign strategy comes amid mounting pressure for an overhaul of Australia's notoriously lax donation laws. Opposition Leader Bill Shorten has promised to slash the current $13,000 disclosure threshold to $1000.

Prime Minister Malcolm Turnbull has failed to back reform despite support for change from former party treasurer Michael Yabsley and Victorian state director Michael Kroger.