Strong anti-poker machine legislation never stood a chance once the gaming lobby was able to put its spin on the wheel.

Julia Gillard has been accused of betrayal for her inability to deliver to Andrew Wilkie the promised mandatory precommitment technology on all poker machines, yet her actions are the direct result of her having been betrayed by a man who once was one of her closest advisers.

In May, James Packer appointed Karl Bitar head of government affairs for his Crown casino business. Until a few weeks earlier, Bitar had been national secretary of the ALP since 2008. He previously spent nine years with the NSW ALP in various jobs, including 11 months as state secretary.

Although Bitar said his role with Crown included responsibility for tourism (read attracting Chinese gamblers to the casino) no one doubted that his principal role was to ensure the federal government did not deliver on its promise to Wilkie.

It was the mother of all betrayals: the man whose old job had been to keep Labor in power had now undertaken to sabotage the deal that kept the minority Gillard government in office. We can be confident that in figuring out how to achieve this, Bitar sought at least unofficial counsel from his old boss in NSW, former state secretary and now Assistant Treasurer and federal Minister for Small Business and Sport, Mark Arbib. (The two of them are so close that their ALP nickname was "Karl Marks".)

It took just eight months. Last Saturday, January 21, Gillard announced that the numbers were not there to enable her to deliver to Wilkie. As a result, he withdrew his support from the government.

How did this happen?

Two things were required: how to pressure Gillard into walking away from Wilkie's demands and how to ensure Wilkie's withdrawal of support would not bring down the government. The two were achieved in tandem.

On October 14, the Australian Financial Review revealed that a coalition of casino operators led by Bitar's boss, Packer, Clubs Australia and the Australian Hotels Association had precommitted $40 million to a massive grassroots campaign to target every NSW federal ALP seat to force members to pressure Gillard into splitting with Wilkie.

It was a threat, pure and simple, with gigantic money behind it. (Compare it to the $18 million spent by the Minerals Council against the government's original mining tax or the $30 million outlaid by the ACTU Australia-wide over several years to combat Work Choices.)

And the article's author, Pamela Williams, stated the role of Karl Bitar in the campaign "cannot be underestimated". Bitar's experience in marginal seats campaigning "makes him invaluable in the grassroots campaign" against sitting ALP members (at least some of whom undoubtedly won their seats when he was on their side).

No one in Canberra reading of this threat can have been in any doubt that the odds against the government surviving had suddenly grown very short.

It can hardly have been coincidence that four days after the article was published, the house speaker Harry Jenkins took the highly unusual step of entering into the public debate on poker machine reform, telling The Age newspaper, "There's got to be a time when government, on behalf of the overwhelming majority of the community, says 'no, enough's enough', because the overwhelming majority of the community are picking up the pieces."

Exactly how Jenkins was influenced to do what he did has yet to be revealed but five weeks later he resigned to return to the backbench and the Liberals' Peter Slipper became the Speaker, depriving the opposition of a vote and giving the government a buffer against Wilkie.

In retrospect, the Wilkie agreement was dead in the water that day, although Wilkie, as late as last week, could not bring himself to believe this. Nor could some members of the government, including Gillard, who continued until last Friday to try to persuade cross-benchers Tony Windsor, Rob Oakeshott and rebel Liberal Tony Crook to support Wilkie's demand for mandatory precommitment technology to be installed on every poker machine in the country.

Windsor and Oakeshott both insisted the precommitment technology be trialled before it is made law and they refuse to budge from that position.

In November, the grassroots campaign against the NSW MPs was proceeding - and causing a lot of grief. "It was a very clever campaign," one MP told me. "It targeted members, and left the government alone. I can handle any campaign but I did not like this one. It was all done through the prism of Wilkie. 'You're only doing this for Wilkie', people would say to me."

The campaign was comprehensive and meticulous, with meetings, rallies, flyers and well-prepared material about the cost to jobs and to community organisations of the alleged assault on clubs' revenue if precommitment was introduced.

Many MPs felt torn. Deborah O'Neill, member for Robertson on the central coast, supports little clubs like the one at Mooney Mooney which, she says, has "a sustainable business model of 50 per cent food, 30 per cent drinks, 20 per cent pokies". Unlike ClubsNSW, which she feels "is addicted to a business model of addiction". O'Neill, who as a former teacher has seen children coming hungry to school because the family's income has gone into the pokies, is also sceptical of some of the clubs' community involvement. "It's not much for a club to support a kid with a number 17 jumper when the kid with number 15's father put money through the pokies to pay for it," she says.

"For me the challenge was people's jobs versus people putting their whole wages through a poker machine," another NSW MP says. The campaign sufficiently unnerved the MPs that they went as a group to talk to Gillard's chief of staff. Some of them also met Gillard individually.

Meanwhile, Kevin Rudd, the man who when he was prime minister had made poker machine reform a federal issue which he referred to the Productivity Commission, was whispering in the ears of any MP who would listen that he was not encumbered by an agreement with Wilkie. "He's been a first-class bastard on this issue," said one of his cabinet colleagues this week.

The presence of Rudd in the campaign became another pressure on Gillard. She has become increasingly unnerved by her predecessor's relentless chipping away at her grip on the leadership.

Early in the new year, the government realised it had just five sitting weeks to meet Wilkie's May 8 deadline of having the precommitment legislation through both houses. It became urgent to test whether the commitment could be honoured. A week of frantic lobbying by the Prime Minister and her colleagues revealed that it could not.

So what were Gillard's options?

Some have suggested that she should have tested the legislation anyway but that has not been the form of this government. Any bill, be it on the Malaysia solution or mandatory precommitment, that was likely to fail has not been introduced. This is a minority government that does not want to lose on the floor of the House and risk venturing into no-confidence territory. You can hardly blame it.

Instead, the government will bring in legislation (which Wilkie will support) to tackle problem gambling through a variety of measures including requiring precommitment technology be installed on all poker machines, ready to operate if the trial supports it. The trial to be held in the ACT, starting next year, is seen by sceptics as merely a tactic to bury the whole issue.

"The clubs will ensure this fails," the Reverend Tim Costello told me this week. "Powerful vested interests can out-campaign anyone,'' he said.

ClubsNSW insists it supports the trial although the ACT clubs have yet to commit.

Minister Jenny Macklin, who is responsible for gambling reform, says, "My job is to design the trial. We'll get independent advice on how to run it. No way we are going to get a decent result if this is not a decent trial."

It is not encouraging that an earlier federal effort to trial the technology was stymied by vested interests.

In August, the Tasmanian Premier, Lara Giddings, suggested that the federal government run a trial of precommitment in her state. It would have been ideal, without the problems the ACT trial presents of leakage into nearby NSW towns and, had it proceeded, the results might have been ready in time to meet the Wilkie deadline. But then the Federal Group, the major operator of hotels in Tasmania including, crucially, Wrest Point Casino, refused to be involved.

The trial, its credibility and its outcome, has become the new battleground.

We can be sure that what remains of the $40 million war chest will be at the ready to steer policy in a direction that satisfies the gambling industry. Already the arguments are being sharpened ("it's a state issue", "precommitment is bad policy that does not help problem gamblers").

This is far from over.

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