The New South Wales gaming regulator conducted only a “brief update” of a multimillion-dollar grants scheme funded by poker machine profits, despite a peak welfare agency pulling out of the program due to concerns it lacked any proper oversight or accountability.
Last year the NSW Council for Social Service (Ncoss) announced it was ending its 24-year involvement in the ClubGrants scheme, after a review found clubs regularly ignored the recommendations of local advisory groups and sometimes viewed the grants as their money “to spend as they see fit”.
Despite promising to conduct a government review after Ncoss raised its concerns, the NSW gambling authority now says there was a “brief update” to the scheme.
The welfare agency said the update did not address any of the “substantive issues” it raised.
“It was not the comprehensive review we asked for and were told would happen,” said Ncoss’s chief executive, Joanna Quilty.
First established in 1998, the ClubsGrants scheme allows clubs to receive tax rebates on poker machine profits by donating money to charities, sporting organisations or groups that make a contribution to the “welfare and broader social fabric” of the local community.
But Ncoss found the scheme lacked transparency and adequate oversight, with clubs often giving themselves “a financial or other advantage” by awarding funds to organisations to which they were linked.
Under grant guidelines, clubs handing out more than $30,000 must establish local committees to advise where money should be donated.
The guidelines stipulate the committees comprise of Ncoss and a representative from local councils.
But Ncoss found clubs were “the sole decision-makers” and local committees had “limited opportunities to influence outcomes”. It also found that in many cases committees were not functioning.
Several councils have told the Guardian that they had little or no oversight over the grants.
In Lake Macquarie, near Newcastle, the council said it had not been involved in the scheme for eight years.
“Lake Macquarie city council chose not to continue partnering with ClubGrants beyond 2014 as the time and resources required for us to administer the program outweighed the value-add we brought to the process,” a spokesperson said.
The Newcastle council, which is home to about 3% of the state’s poker machines, also said it also had no involvement in the scheme. Georges River council said it provided only “administrative support” and did “not approve project funding”.
“The clubs in the ClubGrants local committee make the final decision on which projects are awarded grant funds,” a council spokesperson said.
Even when councils are involved, their recommendations are not binding. Documents obtained by the Guardian show only 69% of applicants to the fund that were given a “high” or “medium” rating by the local committee received funds between 2016 and 2022. In the same period, 36% of applications given a “low” rating received donations.
A spokesperson for Liquor & Gaming NSW said its recent “brief update” of the scheme was aimed at “clarifying processes and procedures”.
It did not, the spokesperson said, “include examining the compliance of individual clubs or grants against the guidelines” or consider the awarding of grants to entities associated with clubs.
Ncoss said the update instead proposed small changes to the scheme.
“Liquor and Gaming came to us in August wanting our agreement to some changes they wanted to make which did not go to the substantive issues our review raised,” Quilty said.
“Some of the changes were a small step in the right direction but they were not the comprehensive review we asked for and were told would happen.”
Documents seen by the Guardian show the bulk of the proposed changes from the review were minor clarifications, including over whether clubs could give money to drought relief and women’s shelters. The only other changes included the removal of Ncoss from the legislation guiding the grants.
Quilty said she was “surprised” when approached about those changes, and understood many of them had been made by ClubsNSW.
