Review of the Registered Clubs Industry in NSW - Clubs NSW

10 Helping clubs better understand the risks and benefits
of diversifying their operations
3. the club first obtained a valuation of the land from an independent valuer.
This section of the Registered Clubs Act also applied to the granting of a lease over
land. However, it excluded leases where the purpose is to provide goods and
services to club members and guests. It also excludes providing goods and services
to the general public subject to approval by members.
This section – particularly the second and third conditions noted above – indirectly
placed limitations on some diversification strategies, namely those involving
divestment of land and property development. However, IPART considers that the
provisions introduced by the Registered Clubs Amendment Act 2006 provide greater
flexibility to clubs to get the best return on, and use from, land while protecting and
preserving the core club assets for members. These provisions:
create a distinction between core property (club premises) and non-core property
(other property such as investment property)
allow clubs to deal with non-core property without the need for approval from
members, independent valuation or public auction
still require approval from members, independent valuation or public auction for
disposal of core property.
IPART considers that these amendments should address concerns about this
legislative constraint on diversification.
ClubsNSW also argued that clubs are constrained in pursuing diversification options
by the prohibition on providing catering anywhere off their premises at functions
sponsored by and paid for by people who are not members of the club. 185 This
regulatory restriction has implications beyond clubs’ diversified business segments
and is discussed in Chapter 13.
10.2 IPART’s findings and recommendations on diversification
IPART found that diversification will not reduce clubs’ reliance on gaming machine
revenue to any great extent but can be a worthwhile strategy for other reasons. In
addition, clubs that pursue diversification need to consider how they can capitalise
on their unique strengths and manage the risks. To assist clubs in effectively
adopting diversification strategies, IPART considers that ClubsNSW should provide
advice and education on diversification.
The sections below discuss these findings in more detail, and set out IPART’s
recommendations in relation to diversification.
185 ClubsNSW, Sydney roundtable, 7 May 2008, p 48.
168 IPART Review of the Registered Clubs Industry in NSW