The Independent Liquor and Gaming Authority (ILGA) in New South Wales is looking to shift the administration of the ClubGRANTS funding scheme to the State Revenue chief commissioner. This move comes amid operational pressures and ongoing scrutiny, as explained in statements from ILGA chair Caroline Lamb and documents obtained by ABC.
Established in 1998, the ClubGRANTS scheme is intended to reinvest a portion of profits from gaming clubs back into local communities, covering areas such as health and welfare services, community development, and sporting clubs. As per 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%. However, this is contingent on the clubs allocating at least 0.75% of the profits beyond that threshold to community-focused initiatives, which comprise two-thirds of the scheme’s funding. The remaining third comes from an additional 0.4% of gaming machine profits above $1 million.
Criticism of the scheme is persistent. Clubs have the ability to use these funds for upgrading their facilities, and there are no strict requirements on how the recipients of the grants must spend the money.
Recent contributions totaled $127 million, with $53.3 million earmarked for sport-related organizations.
Chair Lamb pointed out in a recent review that managing over 500 ClubGRANTS applications annually within a limited timeframe has strained the ILGA's capacity to monitor compliance effectively. She suggested that the State Revenue chief commissioner is better positioned to handle what she described as a tax rebate program.
Green MP Cate Faehrmann has denounced the current scheme, labeling it a ‘rort’—a term for a fraudulent practice—despite NSW government statistics indicating poker machines pose the highest gambling risk in the region. She argued that clubs are using the rebates to reduce their tax bills while simultaneously creating a façade of community support.
Faehrmann reacted sharply to recent gaming machine data revealing that NSW residents lost a record $2.38 billion on poker machines in the second quarter of 2026, attributing these losses to the reforms introduced by the Minns Labor government, stating that the gambling industry enjoys the delays and reviews currently in place.
On the recently announced reforms, which include establishing a statewide exclusion register, the government plans to reduce the number of poker machines, currently at 87,000 across more than 2,100 establishments, by enhancing the forfeiture rate for traded gaming machine entitlements from one in three to one in two.
The NSW government began its first formal review of the ClubGRANTS scheme in over a decade shortly after taking office in 2023. While the review's final report was submitted in January 2025, it remains under consideration, with recent updates clarifying funding criteria and tax obligations.
