The Independent Liquor and Gaming Authority (ILGA) in New South Wales is looking to shift the administration of the ClubGRANTS scheme to the chief commissioner of State Revenue due to operational challenges and ongoing scrutiny. This development emerged from documents obtained by ABC and was discussed by ILGA chair Caroline Lamb on Monday.
The ClubGRANTS initiative, implemented in 1998, was created to distribute a portion of gambling-related profits from gaming clubs back into local communities. This funding supports various areas including health and welfare services, community development, and sports organizations.
As per the Gaming Machine Tax Act 2001, clubs can receive a tax rebate of up to 1.85% on gaming machine profits if they earn more than $1 million (approximately US$715,000) in a tax year. For this rebate to apply, clubs must allocate at least 0.75% of their profits over $1 million to community-oriented activities and services. This allocation constitutes two-thirds of the total funds distributed through the ClubGRANTS scheme, with the remaining third coming from an additional 0.4% of profits exceeding the $1 million threshold during the same period.
Despite its noble intentions, the scheme has faced criticism. Clubs can use the funds for facility improvements, and there is no requirement for verification on how grant recipients spend the money.
The latest report for 2025 revealed that $127 million was distributed, with $53.3 million specifically going to sports organizations.
According to Caroline Lamb, the job of processing over 500 ClubGRANTS applications each year within limited time frames creates significant pressure on ILGA. She pointed out that this burden “practically limits the authority’s ability to most effectively monitor compliance” across the scheme. Lamb proposed that the State Revenue chief commissioner’s office would be better suited for this role, as it is more akin to managing a tax rebate program.
Green MP Cate Faehrmann has labeled the ClubGRANTS scheme a ‘rort’, emphasizing a conflict of interest that allows clubs to minimize tax payments while simultaneously fostering positive community relations. She criticized the proposed administrative changes as superficial and questioned the scheme's efficacy in genuinely supporting community projects versus merely serving as a hidden subsidy for 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. A ‘rort’ is a term used in Australia to describe a trick, scam, or fraudulent practice.
Faehrmann further criticized the recent gaming machine statistics that reported NSW residents incurred a record loss of $2.38 billion on poker machines during the second quarter of 2026. According to her, the losses stem from the reforms introduced by the Minns Labor government, which she claims have resulted in more delays and losses in the gambling sector.
“The question for Chris Minns is simple: how much more harm is he prepared to tolerate before he stands up to the gambling lobby?” she asked.
In late August, the government unveiled a package of so-called ‘evidence-based’ legislative reforms, which not only included a statewide exclusion register but also outlined plans to reduce the number of poker machines from the current 87,000 across 2,100 clubs and hotels. The government aims to achieve this reduction by altering the forfeiture rate for trading gaming machine entitlements from one in three to one in two.
The NSW government has also launched its first comprehensive review of the ClubGRANTS scheme in over a decade following its rise to power in 2023. Although the review concluded in January 2025, officials have not yet made the final report public. A government spokesperson mentioned that ministers are actively considering its findings while updated guidance has been provided to clarify the funding criteria for statewide services and tax obligations.
