A history of machine gambling in the NSW club industry: from community benefit to commercialisation

This paper documents a history of the NSW club industry, with particular emphasis on its evolution to a major contemporary operator of gaming machines at state, national and international levels. It argues that three conditions of club registration - their not-for-profit status, membership requirements, and social benefit objectives - have been instrumental for clubs in gaining and maintaining dominant rights to machine gambling in NSW. These three features of clubs traditionally have underpinned their legitimacy as major providers of machine gambling, reflecting prevailing government policy that linked legalised gambling to social benefit. However, the substantial revenues that accrued from machine gambling, amidst an absence of competition, fuelled an expansion of the club sector that was neither predicted nor planned, with many clubs growing dramatically in assets, membership and facilities. The original club goals of promoting and pursuing the social purpose and community benefit for which they were established became superseded by an emphasis on expansion, market share and profits. More recently, increased competition for the gambling dollar, reflecting a shift in government policy towards economically driven stimulation and expansion of commercial gambling, has further entrenched the commercialisation of clubs in their machine gambling operations, subordinating their social agenda to economic interests. This change in focus by club management has diminished the social contract that exists for clubs to operate gambling for community benefit, the very basis of the clubs’ legitimacy as major providers of machine gambling. Indeed, the implicit assumption that social benefit was built into club machine gambling has allowed the clubs to exploit their position of market dominance in such a way that exacerbates the negative social impacts of their core product.