In New South Wales, the Independent Liquor and Gaming Authority (ILGA) is looking to transfer the administration of the ClubGRANTS scheme to the State Revenue chief commissioner. This decision arises from operational pressures and heightened scrutiny surrounding the scheme, as revealed in documents acquired by ABC and comments from ILGA chair Caroline Lamb on Monday.
The ClubGRANTS scheme, initiated in 1998, aims to redirect a portion of profits gained from gaming clubs back into local communities, funding services related to health and welfare, as well as community development and sports organizations. According to the Gaming Machine Tax Act 2001, clubs that report gaming machine profits exceeding $1 million (approximately US$715,000) can receive a tax rebate of up to 1.85%. To qualify, these clubs must allocate at least 0.75% of their profits above $1 million to community-centered activities. This allocation constitutes two-thirds of the funding for ClubGRANTS, with the remaining third sourced from an additional 0.4% of gaming machine profits over the $1 million benchmark.
However, the scheme has been subject to criticism. Clubs are permitted to use these funds for upgrades to their own facilities, and there are no strict requirements for how the recipients of grants must utilize the money. A recent report regarding contributions for the year 2025 indicated that $127 million was granted, with $53.3 million earmarked specifically for sports organizations.
Caroline Lamb noted in a recent review that processing more than 500 ClubGRANTS applications annually within a limited timeframe has proven burdensome for ILGA. She remarked that this annual workload "practically limits the authority’s ability to most effectively monitor compliance" with the scheme. Lamb believes that the State Revenue chief commissioner’s office would be better suited to manage what she calls a tax rebate program.
Criticism of ClubGRANTS comes from Green MP Cate Faehrmann, who labels the scheme a ‘rort’, underscoring the contradiction inherent in how poker machine operations, deemed the most harmful gambling format in the state, continue to thrive. Approximately 65,000 poker machines are still in operation in NSW, allowing clubs to enjoy substantial tax rebates through the program. Faehrmann challenged the notion that ClubGRANTS genuinely supports community projects, suggesting instead that it serves as an indirect subsidy that reduces scrutiny of gambling revenue. She remarked, "The fact is they’re not generous, they’re a rort."
Faehrmann also pointed to alarming statistics indicating 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 of the Minns Labor government, arguing that the gaming industry benefits from the government's current nuanced approach, which leads to "more reviews, more delays and more record losses." She questioned, "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 government introduced these reforms at the end of August, outlining a package of what it termed "evidence-based" legislation. Among the proposed measures is a plan to decrease the number of poker machines, currently at 87,000 across 2,100 clubs and hotels, by adjusting the forfeiture rate for gaming machine entitlements from one in three to one in two.
Since taking office in 2023, the NSW government has initiated its first formal review of ClubGRANTS in over ten years. Despite the final report being submitted in January 2025, it remains unpublished as ministers continue to consider the findings. Updated guidance has been released to provide clarity on funding criteria for statewide services and related tax obligations.
