Canberra's clubs are claiming payments to coaches and elite sports players and payments for physiotherapy and massage as "community contributions" under poker machine laws, a leading gambling researcher has found.
Dr Charles Livingstone, of Monash University, says the ACT's scheme, which requires clubs to give 8 per cent of poker machine profits to community groups, is deeply flawed, opaque and misleading.
The scheme amounted to "tax farming", where clubs could choose who benefited, and was used by the government and clubs to justify giving the clubs a monopoly on poker machines, and giving them discounted taxes well below national gambling taxes.
Seventy per cent of all community contributions went to sport, almost $1 million of it for wages for grounds staff and administration staff, $244,300 to pay players, $153,700 for coaches, and $17,400 for umpires in 2014-15. Another $830,000 went to elite sports players, $36,000 to physiotherapy and massage, $14,400 for medical supplies and $3910 for drug testing.
Clubs claimed $415,000 for maintenance of sports facilities, including ovals, broken windows, $268,000 for water and sewerage and $145,000 for electricity. They claimed almost $800,000 as in-kind contributions for giving sports groups use of club rooms, $55,500 in fees paid for sports affiliations, and $1500 for fines incurred for game forfeits and melees.
Dr Livingstone is not suggesting clubs are breaking the rules, but says the rules must be reviewed immediately.
The Greens' Shane Rattenbury said it was important to recognise that many of the clubs were set up to support sport so it was appropriate that "a fair amount" went to sport, which brought benefits to the community. But he said there should be an independent fund to distribute some of the funds. And he said tax rate should be on par with other states.
Among other claims:
- Labor's Weston Creek club claimed $12,600 for in-kind hire of its bowling green to support women's sport. The Labor clubs claimed $52,000 for problem gambling, as "payment for counselling/staff training".
- The Ainslie football club group claimed $5700 for 84 online conduct-of-gambling certifications, and $216 for an in-kind donation for room hire and meals for compulsory training for gambling contact officers.
- The Tradies club claimed $225,000 for drug and alcohol training.
- The Hellenic Club claimed $65,300 for in-kind hire of club rooms and equipment for meetings under the banner of "charitable and social welfare" contributions and $272,000 under "not for profit" contributions. It claimed $28,600 as an in-kind contribution for a Christmas party at the club at "a reduced cost".
- The Hellenic Club also claimed $54,000 as in-kind charitable and social welfare contributions for fees including development application, lease variation, legal, crown lease and survey fees for a home site. The law says clubs can't claim taxes, fees or levies. Dr Livingstone said it was not clear how or why such payments were classified as in-kind.
- The Southern Cross club claimed $82,400 for free supply of food, under the "charitable and social welfare" banner.
Head of the Southern Cross Club Ian Mackay said the amount was meals provided to the Red Cross Roadhouse, Vinnies night patrol, Woden Youth Centre and palliative care.
"I don't think that's at all unreasonable, it's part of the giving program that we do. These groups are after food, not cash."
Southern Cross gave more than $1.5 million, most not to sports, he said.
Ainslie group chief Simon Patterson said the claim for staff gambling certification and training was allowable, and the government encouraged clubs to spend on problem gambling.
While a large portion of his club's contributions went to sport, sport was the club's purpose, just as the Tradies supported union initiatives, the Vikings supported rugby, and the Hellenic club supported the Greek community, he said.
The Hellenic club chief executive declined to comment. But the club opened a Greek-Australian preschool in 2014, which could well account for the development claim. The other named clubs have been approached for comment. Clubs ACT chief executive Gwyn Rees said two-thirds of the clubs maintained sports facilities so it would be unsurprising if 70 per cent of the money went to sport.
Contributions are reported each year by the ACT Gambling and Racing Commission but Dr Livingstone said the reports were "sanitised" and failed to properly disclose who benefited or what the money was used for. He had requested detailed returns, but had been given less specific information, which he had matched to individual clubs. His report does not name clubs.
Dr Livingstone said it was difficult for the public to work out how much of the money went to genuine community purposes and how much was "misleading, inappropriate or self-directed". It was clear that "in many cases they are giving the money to themselves".
In 2014, clubs made $167.2 million from poker machines and gave $11.9 million in community contributions, amounting to 6.4 per cent of the money made from poker machines. Of the donations, $4.2 million was "in-kind".
Dr Livingstone said if elite and professional sport was deducted, the community contributions fell to 4.6 per cent of pokie revenue. If in-kind contributions were excluded, the figure fell to just 2.8 per cent.
The government calculates it differently, saying clubs give almost 13 per cent of their "net" gaming machine revenue, which it calculates at $94.1 million (total revenue minus tax and 24 per cent running costs).
Dr Livingstone said the scheme was an "alibi" and a "smokescreen", which allowed clubs to justify their monopoly and to minimise tax.
ACT clubs paid 19.9 per cent tax in 2014-15, compared with a national average of 29.9 per cent, 22.9 per cent in NSW and 41 per cent in Victoria. If ACT clubs paid the same tax as the national average, they would pay an extra $17 million, which was considerably more than the community contributions.
Mr Rees rejected the figures, saying the researchers were "playing with the figures to get the answer they want". If the ACT clubs were taxed under NSW's rates, they would pay $4 million less in tax. The figures didn't take account of higher rates, water charges and liquor fees here, with ACT clubs paying $5190 for a midnight liquor licence, compared with $520 over the border.