Review of the Registered Clubs Industry in NSW - Clubs NSW

6 Strengthening the financial viability of the registered
clubs industry
In a submission, the Leagues Clubs’ Association suggested that to remain financially
viable in response to threats to gaming machine revenue, clubs often have to cut back
on member and community-based initiatives that are loss making, such as
discretionary donations and member subsidies, even though most clubs were
established in order to provide such initiatives. Alternatively, they can increase the
promotion of gaming machine participation in an effort to limit the loss of revenue,
which goes against the Government’s promotion of responsible gambling. 100
Clubs with no gaming machines can be viable depending on their level of volunteer
support or ability to demand higher membership fees
While most clubs rely primarily on gaming machine revenue, this source of revenue
is not necessarily a prerequisite for club financial viability. In fact, a number of
smaller registered clubs successfully operate and provide member services with a
relatively small number of gaming machines or no gaming machines.
ClubsNSW identified that 23.8 per cent of clubs that generate less than $200,000 in
annual gaming revenue are non-profitable (Table 6.5). Therefore most of these small
clubs could be considered as profitable. One of IPART’s case study clubs operates
only 11 gaming machines, but remains financially viable. 101
IPART found that those clubs that operate successfully without significant gaming
machine revenue tend to fall into two categories:
1. Clubs that receive significant contributions from their active member base, who
volunteer their time to operate the club and co-ordinate member activities. For
example, these volunteers might staff the bar, maintain the bowling greens or run
the junior sporting competition.
2. Niche clubs that offer valuable services or benefits to a specific target membership
group, which enables them to demand significant membership fees. For example,
these clubs include exclusive golf clubs or business clubs.
In Western Australia, clubs operate without the support of gaming machine revenue,
largely on a volunteer basis, and provide a similar range of sport-related activities as
NSW registered clubs. In Victoria, clubs successfully operated without gaming
machines until 1992.
IPART notes that a role exists for non-gaming machine clubs in the community. It
considers that any action to support the long-term viability of clubs should not
overlook this category of club.
100 The Leagues Clubs’ Association of NSW submission, 8 April 2008, p 4.
101 Bingara Sporting Club.
98 IPART Review of the Registered Clubs Industry in NSW