The Independent Liquor and Gaming Authority (ILGA) in New South Wales has proposed transferring the administration of the ClubGRANTS scheme to the chief commissioner of State Revenue. This move comes amidst operational pressures and increasing scrutiny over the program.
This information was disclosed in documents obtained by ABC, along with comments from ILGA chair Caroline Lamb on Monday.
Established in 1998, ClubGRANTS is intended to direct a portion of gambling-related profits from gaming clubs back into local communities. This funding supports health and welfare services, community development programs, and sporting organizations.
According to the Gaming Machine Tax Act 2001, registered clubs with gaming machine profits exceeding $1 million (approximately US$715,000) can receive a tax rebate of up to 1.85%. For this rebate to apply, clubs must allocate at least 0.75% of their prescribed profits over $1 million toward community-focused initiatives. This requirement accounts for two-thirds of the financial resources within the ClubGRANTS scheme.
The remaining third is sourced from an additional 0.4% of gaming machine profits that surpass $1 million during the tax year.
Despite its objective, the scheme has been criticized for allowing clubs to redirect funds toward their own infrastructure upgrades, lacking strict verification on how grant recipients use the money. The most recent contribution report for 2025 revealed that $127 million was awarded, with $53.3 million earmarked specifically for sports-related organizations.
Lamb addressed concerns that the ILGA faces a significant burden in its current responsibility to manage over 500 ClubGRANTS applications annually. She stated that this responsibility is “practically limiting the authority’s ability to most effectively monitor compliance” across the scheme. She suggested that the State Revenue chief commissioner’s office would be more capable of managing what she called a tax rebate program.
Criticism of the scheme comes not only from the ILGA but also from politicians like Green MP Cate Faehrmann. While NSW government statistics indicate that poker machines pose the highest gambling risk in the state, approximately 65,000 poker machines remain operational in clubs which benefit significantly from the tax rebates provided through ClubGRANTS.
Faehrmann criticized the arrangement, pointing out a potential conflict of interest where clubs are able to lessen their tax burdens while simultaneously enhancing their community image. She described the proposed administrative changes as “tinkering around the edges,” questioning whether ClubGRANTS truly benefits community projects or merely serves as an indirect subsidy that mitigates scrutiny of gaming revenues. “ClubGRANTS is what the clubs rely upon to push back against any reform. The fact is they’re not generous, they’re a rort,” she asserted, referring to the term as a descriptor of trickery or fraud in Australian parlance.
In addition, Faehrmann reacted to the latest data revealing that NSW residents lost a record $2.38 billion on poker machines during the second quarter of 2026. She attributed these losses to the reforms implemented by the Minns Labor government, saying, “The gambling industry understands exactly what this government’s approach means and they love it: more reviews, more delays, and more record losses.” She challenged Premier Chris Minns, asking how much more harm he would allow before confronting the gambling lobby.
The reforms announced at the end of August aimed to introduce what the government referred to as “evidence-based” legislation. Among other measures, this package proposed a statewide exclusion register and aimed to reduce the state’s poker machine count from the current 87,000 across 2,100 clubs and hotels by adjusting the forfeiture rate for traded gaming machine entitlements from one in three to one in two.
In a further development, the NSW government has commenced its first official review of ClubGRANTS in over ten years since taking office in 2023. Although the final report was submitted in January 2025, it has yet to be publicly released. A government spokesperson indicated that ministers are still reviewing the findings and that updated guidance has been issued to clarify the funding criteria for statewide services and tax responsibilities.
