New South Wales’ Independent Liquor and Gaming Authority (ILGA) has sought to transfer responsibility for overseeing the ClubGRANTS programme, arguing that administration of the poker-machine-funded tax rebate scheme is placing significant pressure on the regulator.
Documents obtained through the NSW Parliament and reported by ABC show that ILGA proposed moving responsibility for the scheme to the state’s Chief Commissioner of State Revenue. The authority said the annual workload associated with ClubGRANTS was restricting the resources available for broader compliance monitoring.
ILGA chair Caroline Lamb told a review of the programme that the authority is required to carry out preliminary checks on applications from more than 500 clubs within a period that can be two weeks or less. She argued that a revenue authority would be better positioned to administer what is effectively a tax rebate programme.
How ClubGRANTS works
Introduced in 1998, ClubGRANTS allows registered NSW clubs generating more than A$1 million in annual gaming-machine profits to receive a tax rebate when they direct qualifying funds towards community projects and services.
Under the current system, clubs can receive a rebate equivalent to 1.85% of gaming-machine profits above A$1 million. At least 0.75% must be allocated to Category 1 purposes, which include community welfare, social services, health, community development and employment assistance. The remaining eligible expenditure can be directed to Category 2 activities such as sport, cultural programmes and other community initiatives.
Revenue NSW says clubs earning more than A$1 million from gaming machines must otherwise pay an additional 1.85% tax on profits above that threshold. Clubs with annual gaming-machine tax exceeding A$250,000 also make a separate 0.4% ClubGRANTS contribution.
The scheme distributed A$127 million during 2025, according to figures cited by ABC, with A$53.3 million going to sporting programmes and facilities. ClubsNSW has defended ClubGRANTS, saying more than A$1.5 billion has been allocated to community initiatives since the programme began.
Oversight concerns remain unresolved
ILGA’s concerns go beyond administrative workload. Documents relating to the government review also raised questions about how grants are monitored after they are awarded, including the absence of a requirement for clubs and recipients to independently verify how all funding is ultimately spent.
The material also noted that clubs can depart from recommendations made by local ClubGRANTS committees. Under current rules, clubs must allocate at least 75% of Category 1 funding in accordance with local committee recommendations, although they can submit an explanation to Liquor & Gaming NSW when that requirement is not met.
NSW Greens MP Cate Faehrmann has argued that the structure creates a conflict because clubs receive tax benefits while simultaneously promoting their financial support for community organisations. ClubsNSW did not respond to ABC’s questions about that criticism.
The NSW government commissioned the first formal review of ClubGRANTS in more than a decade after coming to office in 2023. Its final report was delivered in January 2025 but had still not been publicly released as of September 2026. The office of Gaming and Racing Minister David Harris said the recommendations remained under consideration.
In the meantime, Liquor & Gaming NSW has updated the ClubGRANTS guidelines. Changes introduced in 2026 allow qualifying organisations providing statewide community services to receive Category 2 funding under specified conditions, while also clarifying rules surrounding tax treatment and expenditure.
The debate comes as NSW continues a wider overhaul of gambling regulation, including proposals covering player exclusions, poker-machine numbers, advertising restrictions and future account-based play.