Large clubs are allowed to claim a tax rebate of 1.85 per cent of their pokie profits above $1 million. Photo: John Woudstra
Australia's biggest RSL club, Rooty Hill, was entitled to almost $1 million in poker machine tax rebates last year despite directing grants worth hundreds of thousands of dollars to organisations associated with its directors.
The practice has exposed a loophole in the NSW government-administered ClubGrants scheme which allows large clubs to claim a tax rebate of 1.85 per cent of their pokie profits above $1 million.
The scheme is championed by the clubs movement as evidence of how much its members give back to the community and used to deflect criticism of the hundreds of millions of dollars they make in poker machine profits.
But Fairfax Media can reveal that Rooty Hill RSL last year ignored a key recommendation in the guidelines designed to ensure the neediest community groups benefit.
Category 1 ClubGrants payments are for community organisations working in areas including family support, drug and alcohol services and Aboriginal and Torres Strait Islander health services.
ClubGrants guidelines recommend at least 75 per cent of Category 1 grants should be directed to areas nominated by a committee hosted by the local council.
But clubs are not bound to abide by this and records show that in 2015 none of the Category 1 grants made by Rooty Hill RSL were recommended by the Blacktown City ClubGrants committee.
Instead the largest Category 1 grant issued by Rooty Hill RSL was $494,361 to its own sub-branch for "support for veteran welfare services".
The club says the money was used for events marking the centenary of Anzac.
Rooty Hill sub branch committee president Sean Plunkett is senior vice-chairman of Rooty Hill RSL.
Sub branch committee treasurer Allan Shearan is a Rooty Hill RSL director, as is sub branch assistant secretary Ken Clements.
An $11,110 grant was given to the Australia Philippines Service League towards "support for community education programs".
Rooty Hill RSL director Chris Pilao is "Supreme Commander" of the APSL.
In Category 2 – which allows tax rebates for grants to activities such as sport, veteran welfare, golf course and bowling green maintenance – $25,000 went to the Rooty Hill RSL Youth Club.
Rooty Hill RSL director Allan King is Superintendent of the Youth Club.
A $350,000 grant went to the Sydney Gymnastics and Aquatic Centre Sports Academy Ltd, the directors of which include Rooty Hill RSL chairman Ray Johns.
Rooty Hill RSL earned $48 million in revenue from more than 700 poker machines in 2014, according to its most recent annual report.
A spokesman would not disclose what the club claimed from the NSW government in poker machine rebates for 2015.
But he said it "has complied with its obligations".
"The Club has disclosed the interests of directors in ClubGrants funding allocations as part of its reporting to the statutory bodies," he said.
"The Club is not aware of any current breach or non-compliance from any statutory authorities in relation to its adherence to the ClubGrants guidelines or Category 1 funding allocations."
A spokesman for the Independent Liquor and Gaming Authority said it was looking into the matter but it "does not have any evidence that the grants are not compliant with eligible categories".