The Independent Liquor and Gaming Authority (ILGA) in New South Wales is looking to shift the administration of the ClubGRANTS scheme to the State Revenue chief commissioner due to operational pressures and heightened scrutiny. This intention was disclosed in documents obtained by ABC, along with comments from ILGA chair Caroline Lamb on Monday.
Launched in 1998, the ClubGRANTS scheme was established to redirect a portion of profits generated from gaming clubs back into local communities, supporting health services, welfare initiatives, community development, and sporting organizations.
Under the Gaming Machine Tax Act 2001, registered clubs that earn over $1 million in gaming machine profits are eligible for a rebate of up to 1.85%. However, this rebate is contingent upon these clubs allocating at least 0.75% of their profits exceeding $1 million to community-driven activities and services. This allocation constitutes two-thirds of the funding for the ClubGRANTS scheme, with the remaining third sourced from an additional 0.4% of a club’s gaming machine profits above the $1 million threshold.
Despite its intentions, the scheme has faced criticism. There are allegations that clubs can use the funding for their own facility upgrades, and there’s a lack of strict oversight on how recipients utilize the funds. The recent contribution report for 2025 revealed that $127 million was distributed, with $53.3 million earmarked for sports organizations.
Lamb pointed out that the ILGA faces substantial difficulties in handling over 500 annual ClubGRANTS applications due to the compressed timeframe for processing. She noted that this obligation has hindered the authority’s capacity to effectively monitor compliance within the scheme. According to her assessment, the State Revenue chief commissioner’s office would be better suited for overseeing what she described as a tax rebate program.
Green MP Cate Faehrmann has condemned the ClubGRANTS arrangement, identifying it as a conflict of interest that diminishes the scrutiny of gaming revenues while allowing clubs to lower their tax burdens. Faehrmann referred to the proposed administration changes as merely “tinkering around the edges,” raising doubts about whether ClubGRANTS truly benefits community projects or acts as a subsidy that mitigates the accountability of gaming operations. "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 stated, using a term that connotes trickery or fraudulent behavior.
Faehrmann also criticized the latest gaming machine data revealing record losses of $2.38 billion by NSW residents in the second quarter of 2026. She attributed these losses to the reforms initiated by the Minns Labor government, asserting, "The gambling industry understands exactly what this government’s approach means and they love it: more reviews, more delays and more record losses. The question for Chris Minns is simple: how much more harm is he prepared to tolerate before he stands up to the gambling lobby?"
The reform package, rolled out at the end of August, aims to implement evidence-based legislation, including the establishment of a statewide exclusion register and plans to decrease the number of poker machines from the approximately 87,000 currently in operation across 2,100 clubs and hotels. The government intends to achieve this by altering the forfeiture rate for trading gaming machine entitlements from one in three to one in two.
The NSW government has been conducting its first formal review of ClubGRANTS in over a decade since taking office in 2023. Although the final report was submitted in January 2025, it has not yet been made public. A government spokesperson indicated that ministers are currently reviewing the findings, and updated guidance has been released to refine the funding criteria for statewide services and tax responsibilities.
