Review of the Registered Clubs Industry in NSW - Clubs NSW

2 The registered clubs industry in NSW
These elements reflect, in part, the historical development of the clubs industry, as
discussed in section 2.1.
IPART notes that the extent to which clubs pursue these functions has contributed to
a wide range of clubs operating within the industry. At one end of the spectrum are
small, volunteer-run clubs, with little or no revenue from gaming machines. These
clubs are often centred on specifically pursuing a particular social purpose, such as
providing sporting facilities or a meeting place for members sharing a common
cultural link. At the other end are large, more commercially-run enterprises, with a
large number of gaming machines, many members and a significant number of
visitors, as well as diversified business segments. While these clubs still exist to
pursue social outcomes, differentiation from for-profit commercial businesses is
more difficult.
IPART notes the argument made by ClubsNSW that registering a club provides a
means of entrenching the essential rules that underpin the democratic, not-for-profit
operation of clubs and also the strict probity requirement that ensures member
interests are protected. 21 These rules are captured through the requirements in
section 10 of the Registered Clubs Act and must be met before the certificate of
registration is issued and also on an ongoing basis to ensure that the club is not deregistered
or another penalty imposed. The following elements serve these purposes:
The club must be conducted in good faith as a club. It must demonstrate,
typically through its articles of association/club constitution, that it is a body or
association of persons that pursue a common purpose (social, literary, political,
sporting or athletic purposes or for any other lawful purposes).
Clubs must be incorporated under the Corporations Act.
No member of the club is permitted to receive any profit, benefit or advantage
from the club that is not offered fully to every other member of the club.
While the club is allowed to provide liquor to its members, this must be done in a
safe, controlled environment. Additionally, no employee or director of the club is
allowed to receive payment based on the amount of liquor sold or by any
reference to the operation of gaming machines by the club.
The club must keep correct accounts and books in respect of the financial affairs of
the club. These must be available to members such that they can monitor the
performance of the club in a similar way to that of shareholders in a publicly
listed company.
Senior employees and directors of clubs must comply with a strict set of
accountability requirements. These requirements ensure that the club is operated
with the best interests of the club members in mind.
The club must have premises of which it is the bona fide occupier for the purposes
of the club and which are provided and maintained from the funds of the club.
21 ClubsNSW submission, 31 July 2007, p 21.
36 IPART Review of the Registered Clubs Industry in NSW