jili tutorial

Australia’s ClubGRANTS Scheme: A Comprehensive Guide to the Controversial Pokies Funding Program and Proposed Administrative Overhaul

By jili tutorial · September 17, 2026

Australia’s ClubGRANTS Scheme: A Comprehensive Guide to the Controversial Pokies Funding Program and Proposed Administrative Overhaul

Introduction: A Scheme at a Crossroads

The Independent Liquor and Gaming Authority (ILGA) in New South Wales (NSW) has signaled its desire to hand over the administration of the ClubGRANTS scheme to the State Revenue chief commissioner. This move, revealed through documents obtained by the ABC and public statements from ILGA chair Caroline Lamb, comes amid operational pressures and sustained public scrutiny over how gambling profits are distributed back into communities.

But what exactly is ClubGRANTS? Why has it become a lightning rod for criticism? And what could a change in administration mean for the future of community funding tied to poker machine revenue? This guide breaks down the mechanics, the controversy, and the proposed reforms.

What Is ClubGRANTS? Origins and Purpose

A Tax Rebate Disguised as Community Funding

Introduced in 1998, the ClubGRANTS scheme was designed to channel a share of gambling-linked profits from licensed clubs back into local communities. The core idea: clubs that generate significant revenue from poker machines would receive a tax rebate in exchange for funding community projects and services.

Under the Gaming Machine Tax Act 2001, registered clubs with annual gaming machine profits exceeding $1 million (approx. US$715,000) can claim a tax rebate of up to 1.85% of those profits. To qualify, a club must allocate at least 0.75% of its prescribed profits over $1 million to community-focused activities.

How the Funding Is Structured

The scheme’s funding comes from two sources:

In 2025, the latest contribution report showed that $127 million was awarded through the scheme, with $53.3 million specifically directed to sport-related organisations. The remaining funds support health and welfare services, community development, and sporting clubs.

The Administrative Burden on ILGA

Processing Over 500 Applications in a Tight Window

ILGA chair Caroline Lamb described the current administrative responsibility as a significant constraint. The authority must annually process over 500 ClubGRANTS applications within a short timeframe. Lamb told a recent review that this task “practically limits the authority’s ability to most effectively monitor compliance” across the scheme.

The pressure is compounded by the fact that ILGA’s core mandate is liquor and gaming regulation, not tax administration. Lamb argued that the State Revenue chief commissioner’s office would be better equipped to manage what she characterised as a tax rebate programme rather than a grant program.

Proposed Transfer to State Revenue: What It Means

A Shift from Oversight to Tax Administration

The proposed transfer would move ClubGRANTS from ILGA’s regulatory framework into the tax system. This could streamline processing and compliance monitoring, but critics worry it could further entrench the scheme as a routine tax break rather than a vehicle for genuine community benefit. The State Revenue office has existing infrastructure for handling rebate claims and auditing compliance, which could reduce delays and improve transparency.

Potential Benefits and Risks

Criticism and Conflict of Interest: ‘ClubGRANTS Is a Rort’

Green MP Cate Faehrmann’s Strong Rebuke

The scheme has faced ongoing criticism from advocacy groups and politicians. Cate Faehrmann, a New South Wales Greens MP, has been particularly vocal. She described ClubGRANTS as “a rort” — an antipodean term for a trick, scam, or fraudulent practice.

Faehrmann highlighted a fundamental conflict of interest: clubs reduce their tax liabilities while simultaneously cultivating community goodwill. “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 said.

Scrutiny of Funding Allocation and Lack of Verification

One of the most contentious aspects is that clubs can direct the funds towards upgrading their own facilities. There is no mandated verification for how grant recipients must deploy the money, raising questions about whether the scheme genuinely supports independent community projects or functions as an indirect subsidy for clubs.

The Broader Context: NSW Poker Machine Harm

Record Losses and Continuing Harm

NSW government figures classify poker machines as the most harmful gambling format in the state. Clubs operate approximately 65,000 poker machines, and the state has a total of 87,000 machines across 2,100 clubs and hotels.

In the second quarter of 2026, NSW residents lost a record $2.38 billion on pokies. Faehrmann blamed the Minns Labor government’s reforms for these losses, claiming, “The gambling industry understands exactly what this government’s approach means and they love it: more reviews, more delays and more record losses.”

Government Reforms Announced in August

At the end of August 2026, the NSW government introduced a package of “evidence-based” legislation aimed at curbing poker machine harm. The package includes:

These measures are part of a broader effort to reduce the 87,000-machine count, but critics argue they fall short of meaningful reform.

The State Review: Still Under Wraps

First Formal Review in Over a Decade

The NSW government initiated its first formal review of ClubGRANTS in over a decade after taking office in 2023. Although the final report was submitted in January 2025, it has yet to be released publicly.

A government spokesperson stated that ministers are still considering the review’s findings. Meanwhile, updated guidance has been issued to clarify funding criteria for statewide services and tax obligations. The delay has fueled suspicion that the government is hesitant to confront the powerful club lobby.

What Could the Review Recommend?

While the contents remain undisclosed, possible recommendations could include:

Examples of ClubGRANTS in Action (Hypothetical but Typical)

Sporting Club Upgrade

A local rugby league club receives $50,000 from a nearby registered club’s ClubGRANTS allocation. The money is used to renovate the clubhouse and install new lighting. Because there is no verification requirement, the recipient club does not have to demonstrate community benefit beyond the project itself.

Health and Welfare Service

A community health centre receives $30,000 to run a gambling addiction support program. However, the funding is intermittent and not tied to measurable outcomes. Critics argue that such programs are often used as a public relations tool for the very industry causing the harm.

Conclusion: Tinkering or Transformation?

The proposed transfer of ClubGRANTS administration from ILGA to the State Revenue chief commissioner represents a significant operational change, but it may not address the deeper criticisms. As Cate Faehrmann put it, it’s “tinkering around the edges.” The scheme remains a tax rebate mechanism that allows clubs to reduce their gambling tax liability while claiming community credentials.

With a long-awaited review still unreleased and new reforms struggling to stem record losses, the future of ClubGRANTS — and the broader pokie system in NSW — hangs in the balance. For now, the scheme continues to operate under the same fundamental structure, with the proposed administrative shift possibly the first step toward a more fundamental reassessment.