HALIFAX -- A new video lottery terminal gaming centre opened this week in Halifax despite an outcry from residents who fear it will lead to a spike in gambling addiction, but the native community behind the facility says its revenue is needed to resolve a housing shortage.

Sipekne'katik Entertainment, which features 45 VLTs, is located in the suburb of Hammonds Plains on territory belonging to the Shubenacadie First Nation. The native band held a ribbon-cutting ceremony Friday to mark its opening.

Nathan Sask, the director of operations for the band, said his 2,500-member community needs the VLT money to help alleviate a dire housing situation.

"We have some families with 10 family members living in three-bedroom houses," Sask said.

"We have a severe housing shortage and we have problems with the existing housing we have. We don't have enough funding to maintain them properly."

But some who live near the gaming centre say they are worried it makes gambling too easily accessible.

"This is not economic development," said Joanne Worden. "It's money going into a machine."

Worden said the band should have considered opening a different business -- a gas station, restaurant, fitness centre or convenience store, to name a few -- more suited for the family-oriented neighbourhood.

Shubenacadie operates 35 other VLTs outside Halifax that brought in about $1.9 million in the 2012-13 fiscal year, according to the band's financial statements. But that number is dwarfed by the VLT revenues flowing to the Millbrook First Nation in Truro, N.S., a model Sask says his community is trying to emulate.

On average, revenues from Millbrook's 120 VLTs made up roughly $13 million of the $25 million it raked in annually over the past five years, the band's chief said.

Those funds support numerous initiatives in the community, including education, housing and infrastructure needs, Bob Gloade said.

"None of it would have been possible without our gaming facilities," he said, citing a new school and civic centre as examples.

"You name it. It covers a large gamut of services to our membership."

Eleven of the 13 First Nations in Nova Scotia operate VLTs under gaming agreements negotiated with the provincial government. VLTs generated close to $38 million for those communities in 2012-13, according to government figures.

"The province's approach to gaming is to ensure that it is taking place in a safe way that also helps to provide revenue for programs and services that matter to Nova Scotians," Glenn Friel, a spokesman for the province's Communities, Culture and Heritage Department, said in an email.

But Terry Fulmer, who has opposed VLTs in Nova Scotia for years, said the machines are a "social mistake" and should be banned outright.

"The aboriginal bureaucrats and politicians well understand the harm," he said in an email. "They see it in their own communities and they see the money-making nature as well."

Fulmer said he understands that some First Nations need to find funding for public services, be he cautioned that the cost of VLT profits can be bankruptcy, theft and suicide.

"There is a huge need, but please, not on the backs of VLT addicts."

Nova Scotia and Manitoba are the only provinces where First Nations operate VLTs outside of casinos. But in Manitoba, revenues from VLTs only contribute one per cent to band budgets, whereas that figure is 37 per cent in Nova Scotia, said Yale Belanger, a professor of Native American studies at the University of Lethbridge in Alberta.

"The VLTs in Nova Scotia are much more substantial, and the revenues generated are used for community development purposes to a much greater degree than in Manitoba," Belanger said.

Tracie Afifi, a professor in the department of community health sciences at the University of Manitoba, said a study she helped write concluded that VLT gambling outside of casinos constitutes the greatest risk for problem gamblers.

"When something is so accessible and easy to access, if someone starts to develop a problem, it's really difficult for them to control those problem behaviours because it's just constantly within their environment," Afifi said.

"It's really the availability and accessibility that makes VLTs outside casinos a problem."