The Independent Liquor and Gaming Authority (ILGA) in New South Wales is proposing to move the management of the ClubGRANTS scheme to the State Revenue chief commissioner. This shift is being considered due to operational challenges and ongoing scrutiny surrounding the scheme.
Caroline Lamb, ILGA chair, discussed the proposal on Monday, revealing insights from documents obtained by ABC. The ClubGRANTS scheme, established in 1998, is intended to contribute a portion of gambling-related profits from gaming clubs back into local communities, financing health and welfare services, community development, and sporting clubs.
Under the Gaming Machine Tax Act 2001, clubs with gaming machine profits exceeding $1 million (approximately US$715,000) can receive a tax rebate of up to 1.85%. To qualify, they must allocate at least 0.75% of their profits above $1 million to community-focused activities. These contributions account for two-thirds of the funds available through ClubGRANTS, with the remainder derived from an additional 0.4% of profits over that threshold.
Criticism of the scheme has emerged, particularly surrounding the flexibility clubs have in directing funds towards their facilities. There are no strict verification processes for how these funds must be used by grant recipients. The most recent contribution report for 2025 noted that $127 million was allocated, with $53.3 million designated for sports-related organizations.
Caroline Lamb indicated that the annual process of managing over 500 ClubGRANTS applications within a limited timeframe imposes substantial constraints on ILGA. She emphasized that this responsibility restricts the authority's capacity to effectively monitor compliance within the scheme.
Lamb recommended that the management of the program would be more suitably handled by the State Revenue chief commissioner, labeling it a tax rebate initiative.
Green MP Cate Faehrmann has voiced her opposition to the scheme, calling it a conflict of interest since clubs benefit from tax breaks while also cultivating goodwill within communities. She characterized the proposed changes as minimal, questioning the true support of ClubGRANTS for community projects and suggesting it serves as an indirect subsidy that minimizes scrutiny of gaming profits.
Faehrmann stated, "ClubGRANTS is what the clubs rely upon to push back against any reform. The fact is they’re not generous, they’re a rort," using the term to denote a scam or deceptive practice.
The MP criticized the latest gaming machine data showing residents in NSW lost a record $2.38 billion on poker machines in Q2 of 2026. She attributed these losses to the reforms enacted 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 government’s reforms, unveiled at the end of August, include a set of evidence-based legislative measures aimed at reducing the number of poker machines, which currently stands at 87,000 across 2,100 clubs and hotels. One proposed step is to increase the forfeiture rate when gaming machine entitlements are traded from one in three to one in two.
The NSW government has yet to publicly release the findings from its first formal review of ClubGRANTS in over a decade, submitted in January 2025, as ministers continue to deliberate the report’s recommendations. Meanwhile, new guidance has been provided to clarify the funding criteria for statewide services and related tax obligations.
