One of the most prominent gaming machine venues in Australia has transferred over $26m from its gaming revenues over a span of eight years to its overseeing company – a well-known rugby league team. This transfer was recorded as a contribution to the community, thereby allowing them to qualify for a tax reduction.

In New South Wales, there’s a provision named ClubsGrants that offers tax benefits to clubs that allocate a portion of their gambling revenues for community projects. However, this provision has faced scrutiny and is currently under evaluation by the state authorities.

The provision permits clubs to attain tax benefits by channeling their gaming machine earnings to cover their operational expenditures or those of a linked entity. This has spurred allegations that the ClubsGrants is being misused and should be abolished.

From the fiscal year 2014-15, the leagues club located in western Sydney’s Canterbury region – home to 634 gaming machines as of the end of May – has remitted $26.4m to its parent company, a prominent rugby league team in Canterbury-Bankstown. These transfers, although legitimate and within regulations, were labeled as “efforts towards community growth and assistance”.

The funds shifted to the rugby league team overshadowed what was allocated to local non-associated community organizations, as revealed in the club’s financial disclosures.

In the previous year, the rugby team from Canterbury-Bankstown posted an after-tax profit of $10m. The figures were $4.5m the year before that, and $4.4m in 2020.

The ClubsGrants was initiated with the intention of ensuring major registered clubs in NSW support local community services, particularly for the disadvantaged.

The NSW Council for Social Service, after distancing itself from the ClubGrants following an internal review that pointed out potential conflicts of interest, opined that the provision doesn’t align with current community standards.

Joanna Quilty, the head of Ncoss, expressed concerns about the scheme, stating that it falls short of contemporary standards for a publicly-funded grants program.

Rev Stu Cameron of Wesley Mission, a member of the NSW government panel focusing on gambling reforms, emphasized that while these transactions were legal, they highlight the core issues with the ClubsGrants system. He suggested that the funds could have been better utilized to support individuals facing economic challenges.

Cameron acknowledged the positive contributions of the Canterbury Leagues Club towards local projects that uplifted economically disadvantaged individuals. However, he felt that the financial support extended to a thriving rugby league team seemed excessively disproportionate.

Both the rugby team from Canterbury-Bankstown and the Canterbury leagues club were approached for their remarks.

Cate Faehrmann, a Greens MP from the state, emphasized the need for an immediate review or discontinuation of the scheme. She pointed out that while major clubs often emphasize their community contributions, a significant portion of their grants go to their own affluent sports teams.

A representative for the gaming minister, David Harris, mentioned that the ClubsGrants review is intended to evaluate its benefits to the citizens of NSW.