The Act taxes profits from approved gaming machines in hotels and registered clubs, with hoteliers and clubs liable and payments made as quarterly instalments. CMS licensees, the Independent Liquor and Gaming Authority and the Chief Commissioner handle returns, instalment calculations, assessments and enforcement. Registered clubs can claim a capped ClubGRANTS rebate by directing prescribed profits to approved community projects under Ministerial guidelines. It raises revenue while incentivising limited community spending, but imposes reporting, verification and compliance burdens on payers.
The Gaming Machine Tax Act 2001 (NSW) imposes a tax on the net profits derived from approved gaming machines (commonly known as poker machines) operated in hotels and on the premises of registered clubs. The core operative provision is s 6(1), which states that “a tax is payable on profits from gaming machines kept in a hotel or on the premises of a registered club”. Liability falls on the hotelier or the registered club concerned (s 6(2)).
Profits are rigorously defined in s 3(1) as “the excess of revenue from the machine over outgoings”. Revenue is the total amount of bets made on the machine, expressly including bets made using a promotional prize (s 3(1)). Outgoings are limited to winnings paid or payable, progressive jackpot prizes, and (for machines linked under Part 10 of the Gaming Machines Act 2001) amounts deducted to build linked jackpots. Promotional prizes are carved out of winnings, reflecting the 2021 amendments that clarified their treatment (see Schedule 2, Part 6, cl 11).
The Act adopts a quarterly instalment system (s 7). For hoteliers the tax year runs from 1 July; for clubs it runs from 1 September (s 3(1)). Each tax year is divided into four three-month instalment periods, with payment required within 21 days after the end of each period. The hotelier or club must deposit the calculated amount in a bank account and authorise the Chief Commissioner of State Revenue to direct-debit it (s 7(3)), with a maximum penalty of 20 penalty units for non-compliance.
Calculation of both instalments and annual liability is governed by complex progressive scales set out in Part 3. For hoteliers, s 12 establishes six cumulative brackets commencing at $25,000, with rates prescribed in the table to s 13A. From the 2010 tax year onward the first two brackets are nil, so no tax is paid on the first $200,000 of annual profits. Instalment calculations in s 13 mirror the annual structure but use quarterly thresholds that are one-quarter of the annual ones.
Current sections
Direct links to the current provisions in Gaming Machine Tax Act 2001.
Chief Commissioner means the Chief Commissioner of State Revenue referred to in section 60 of the Taxation Administration Act 1996.
CMS licensee means the holder of a CMS licence within the meaning of the Gaming Machines Act 2001.
gaming machine means an approved gaming machine within the meaning of the Gaming Machines Act 2001.
hotel, hotel licence and hotelier have the same meanings as in the Liquor Act 2007.
instalment period means a period prescribed by section 7.
outgoings, in relation to a gaming machine, means—
(a) winnings, or
(b) progressive jackpot prizes, or
(c) for a gaming machine that is a part of an authorised linked gaming system operating under the Gaming Machines Act 2001, Part 10—the amount that is deducted from the gaming machine to build a prize for the authorised linked gaming system.
profits, in relation to a gaming machine, means the excess of revenue from the machine over outgoings in relation to the machine.
progressive jackpot prize means the amount to which a gaming machine player or other person is entitled to be paid—
(a) for the achievement by the player, at the end of a play, of a combination of symbols designated, in the original design of the gaming machine, or in a subsequent modification approved by the Authority, as a progressive jackpot combination, or
(b) on the happening of another event or contingency which the Authority approves, by written instrument, as being a due occasion for a progressive jackpot prize for the purposes of this definition.
revenue from a gaming machine means the total amount of bets made on a gaming machine by a player, including bets made using a promotional prize.
tax means tax imposed by this Act on profits from gaming machines.
tax year means—
(a) in relation to a hotelier—the period of 12 months commencing on 1 July, and
(b) in relation to a registered club—the period of 12 months commencing on 1 September.
winnings means the total amount of prizes won by and paid or awarded, or liable to be paid or awarded, to a player from playing a gaming machine, but does not include promotional prizes.
(2) (Repealed)
(3) A reference in this Act to a tax year of a specified year is a reference to the tax year that commences in that specified year. For example, a reference to the 2004 tax year is a reference to the tax year that commences on 1 July 2004 (in relation to a hotelier) or 1 September 2004 (in relation to a registered club).
s 3: Am 2001 No 127, Sch 5.3 [1] [2]; 2003 No 34, Sch 2 [1] [2]; 2007 No 92, Sch 4.8 [1]–[5]; 2011 No 72, Sch 5.4; 2021 No 37, Sch 1[1] [2].
4
Relationship with Taxation Administration Act 1996
4 Relationship with Taxation Administration Act 1996
This Act is to be read together with the Taxation Administration Act 1996, which makes provision for the administration and enforcement of this Act and other taxation laws.
Notes included in this Act do not form part of this Act.
Part 2
Gaming machine tax
Part 2 Gaming machine tax
Part 2 Gaming machine tax
6
Tax on gaming machines
6 Tax on gaming machines
6 Tax on gaming machines
(1) A tax is payable on profits from gaming machines kept in a hotel or on the premises of a registered club.
(2) The tax is payable by the hotelier or registered club concerned.
(3) In the event of a tax default (within the meaning of the Taxation Administration Act 1996) in respect of an amount of tax for which a hotelier is liable—
(a) the hotelier, and
(b) any person who, at the time the amount became due, was directly interested in the business, or the profits of the business, carried on under the hotel licence,
are jointly and severally liable to pay the amount concerned, and section 45 of that Act applies accordingly.
Note—
Section 45 of the Taxation Administration Act 1996 provides for recovery of tax where two or more persons are jointly liable to pay it.
s 6: Am 2007 No 92, Sch 4.8 [6].
7
Payment by instalments
7 Payment by instalments
7 Payment by instalments
(1) For the purposes of this Act—
(a) each tax year of a hotelier is divided into 4 periods of 3 months commencing on 1 July, 1 October, 1 January and 1 April, and
(b) each tax year of a registered club is divided into 4 periods of 3 months commencing on 1 September, 1 December, 1 March and 1 June.
(2) Quarterly instalments of tax are payable by a hotelier or registered club to the Chief Commissioner within 21 days after the end of each instalment period.
(3) A hotelier or registered club must—
(a) before the end of each such 21-day period, deposit the amount payable in a bank or financial institution, and
(b) make such arrangements with the Chief Commissioner as enable the Chief Commissioner to access or appropriate that amount (such as by way of direct debit from the account of the hotelier or registered club concerned).
Maximum penalty—20 penalty units.
(4) In the case of hoteliers, the liability to pay such an instalment lies with the hotelier who holds the relevant hotel licence at the time the instalment is due.
s 7: Am 2001 No 127, Sch 5.3 [3]; 2003 No 34, Sch 2 [3]; 2007 No 92, Sch 4.8 [6].
8
Returns
8 Returns
8 Returns
(1) The Authority may from time to time, by notice published in the Gazette, require—
(a) all hoteliers and registered clubs that keep gaming machines, or
(b) specified hoteliers or registered clubs that keep gaming machines, or
(c) specified classes of hoteliers or registered clubs that keep gaming machines,
to lodge with the CMS licensee a return, in a form approved by the Authority, in relation to the performance of those gaming machines and the tax payable under this Act in relation to those gaming machines.
(2) A hotelier or registered club must comply with the requirements of such a notice within the time specified by the notice.
(3) A hotelier or registered club must not, in purported compliance with this section, lodge with the CMS licensee a return that is false or misleading in a material particular.
(4) Proceedings for an offence under subsection (3) may be commenced at any time within the period of 3 years that next succeeds commission of the offence.
(5) The hotelier or registered club is to retain a copy of each return lodged under this section for a period of not less than 3 years after the date on which it was lodged.
Maximum penalty—20 penalty units.
s 8: Am 2007 No 92, Sch 4.8 [5].
9
Calculation and assessment of tax
9 Calculation and assessment of tax
9 Calculation and assessment of tax
(1) As soon as practicable after receipt of a return from a hotelier or registered club in relation to a quarterly instalment period, a CMS licensee must—
(a) calculate the amount of each quarterly instalment of tax payable by the hotelier or club, and
(b) advise the Chief Commissioner (and the hotelier or registered club concerned) of the calculated amount.
(2) The Authority may from time to time—
(a) where it is of the opinion that the information provided in a return might be incorrect, or
(b) for such other reason as seems sufficient to the Authority,
and after making such inquiries as it thinks fit and taking into account such information as may be available to it, recalculate the amount of any quarterly instalment of tax payable by a hotelier or registered club, and advise the Chief Commissioner accordingly.
(2A) The Chief Commissioner must notify the hotelier or registered club concerned of any recalculation advised to the Chief Commissioner under subsection (2).
(3) The Chief Commissioner is to assess or reassess, under Part 3 of the Taxation Administration Act 1996, tax liabilities according to calculations, and any recalculations, made under this section and any rebate available under Part 4.
s 9: Am 2004 No 55, Sch 1.12 [1] [2]; 2007 No 92, Sch 4.8 [5].
10
Adjustments
10 Adjustments
10 Adjustments
(1) Following the end of a tax year and after payment by a hotelier or registered club of the instalment payable in respect of the last of the instalment periods for the tax year, the Authority must, on application by the hotelier (or any relevant previous hotelier) or by the club concerned, make a comparison of the tax payable in respect of that tax year and the total of the relevant 4 quarterly instalments made, and advise the Chief Commissioner of the result of that comparison.
(2) If the amount of tax assessed to be payable is less than the amount paid by the hotelier or registered club for the tax year concerned, the Chief Commissioner may—
(a) hold the difference in credit for the hotelier or club, or
(3) In a case where the tax for the tax year concerned was paid by more than one hotelier, any credit or refund of tax may be apportioned among those hoteliers in such proportions as the Chief Commissioner considers appropriate.
s 10: Am 2007 No 92, Sch 4.8 [5].
11
Apportionment of liability for tax in certain circumstances
11 Apportionment of liability for tax in certain circumstances
11 Apportionment of liability for tax in certain circumstances
(1) The Chief Commissioner may, in such manner as the Chief Commissioner considers appropriate—
(a) apportion the liability for tax as between hoteliers—
(i) in any case where there has been a change in the ownership of a hotel licence, or
(ii) in such other circumstances as the Chief Commissioner considers appropriate, and
(b) apportion the liability for tax as between registered clubs—
(i) in the event of an amalgamation of a registered club as referred to in the Registered Clubs Act 1976, or
(ii) in such other circumstances as the Chief Commissioner considers appropriate.
(2) Subsection (1) (a) does not affect the operation of section 7 (4).
s 11: Am 2007 No 92, Sch 4.8 [6] [7].
Part 3
Rates of tax
Part 3 Rates of tax
Part 3 Rates of tax
pt 3: Subst 2003 No 34, Sch 2 [4].
Division 1
Hoteliers
Division 1 Hoteliers
Division 1 Hoteliers
pt 3, div 1: Subst 2003 No 34, Sch 2 [4].
12
Annual rate for hoteliers
12 Annual rate for hoteliers
12 Annual rate for hoteliers
(1) If the profits from all gaming machines kept in a hotel in a tax year do not exceed $25,000, tax is payable on the profits at the rate of tax rate 1 for the tax year.
(2) If the profits from all gaming machines kept in a hotel in a tax year exceed $25,000, but do not exceed $200,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on so much of those profits as exceeds $25,000 at the rate of tax rate 2 for the tax year.
(3) If the profits from all gaming machines kept in a hotel in a tax year exceed $200,000, but do not exceed $400,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on so much of those profits as exceeds $200,000 at the rate of tax rate 3 for the tax year.
(4) If the profits from all gaming machines kept in a hotel in a tax year exceed $400,000, but do not exceed $1,000,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $200,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on so much of those profits as exceeds $400,000 at the rate of tax rate 4 for the tax year.
(5) If the profits from all gaming machines kept in a hotel in a tax year exceed $1,000,000, but do not exceed $5,000,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $200,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on $600,000 of those profits at the rate of tax rate 4 for the tax year, and
(e) on so much of those profits as exceeds $1,000,000 at the rate of tax rate 5 for the tax year.
(6) If the profits from all gaming machines kept in a hotel in a tax year exceed $5,000,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $200,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on $600,000 of those profits at the rate of tax rate 4 for the tax year, and
(e) on $4,000,000 of those profits at the rate of tax rate 5 for the tax year, and
(f) on so much of those profits as exceeds $5,000,000 at the rate of tax rate 6 for the tax year.
Note—
From the 2010 tax year, tax rates 1 and 2 are nil. Accordingly, no tax is payable on profits of up to $200,000.
s 12: Subst 2003 No 34, Sch 2 [4]. Am 2010 No 46, Sch 3 [1].
13
Instalment rate for hoteliers
13 Instalment rate for hoteliers
13 Instalment rate for hoteliers
(1) If the profits from all gaming machines kept in a hotel in an instalment period do not exceed $6,250, the instalment payable is the amount determined by multiplying those profits by tax rate 1 for the tax year in which the instalment period commences.
(2) If the profits from all gaming machines kept in a hotel in an instalment period exceed $6,250, but do not exceed $50,000, the instalment payable is the sum of the following amounts—
(a) the amount determined by multiplying $6,250 by tax rate 1 for the tax year in which the instalment period commences,
(b) the amount determined by multiplying the amount by which those profits exceed $6,250 by tax rate 2 for the tax year in which the instalment period commences.
(3) If the profits from all gaming machines kept in a hotel in an instalment period exceed $50,000, but do not exceed $100,000, the instalment payable is the sum of the following amounts—
(a) the amount determined by multiplying $6,250 by tax rate 1 for the tax year in which the instalment period commences,
(b) the amount determined by multiplying $43,750 by tax rate 2 for the tax year in which the instalment period commences,
(c) the amount determined by multiplying the amount by which those profits exceed $50,000 by tax rate 3 for the tax year in which the instalment period commences.
(4) If the profits from all gaming machines kept in a hotel in an instalment period exceed $100,000, but do not exceed $250,000, the instalment payable is the sum of the following amounts—
(a) the amount determined by multiplying $6,250 by tax rate 1 for the tax year in which the instalment period commences,
(b) the amount determined by multiplying $43,750 by tax rate 2 for the tax year in which the instalment period commences,
(c) the amount determined by multiplying $50,000 by tax rate 3 for the tax year in which the instalment period commences,
(d) the amount determined by multiplying the amount by which those profits exceed $100,000 by tax rate 4 for the tax year in which the instalment period commences.
(5) If the profits from all gaming machines kept in a hotel in an instalment period exceed $250,000, but do not exceed $1,250,000, the instalment payable is the sum of the following amounts—
(a) the amount determined by multiplying $6,250 by tax rate 1 for the tax year in which the instalment period commences,
(b) the amount determined by multiplying $43,750 by tax rate 2 for the tax year in which the instalment period commences,
(c) the amount determined by multiplying $50,000 by tax rate 3 for the tax year in which the instalment period commences,
(d) the amount determined by multiplying $150,000 by tax rate 4 for the tax year in which the instalment period commences,
(e) the amount determined by multiplying the amount by which those profits exceed $250,000 by tax rate 5 for the tax year in which the instalment period commences.
(6) If the profits from all gaming machines kept in a hotel in an instalment period exceed $1,250,000, the instalment payable is the sum of the following amounts—
(a) the amount determined by multiplying $6,250 by tax rate 1 for the tax year in which the instalment period commences,
(b) the amount determined by multiplying $43,750 by tax rate 2 for the tax year in which the instalment period commences,
(c) the amount determined by multiplying $50,000 by tax rate 3 for the tax year in which the instalment period commences,
(d) the amount determined by multiplying $150,000 by tax rate 4 for the tax year in which the instalment period commences,
(e) the amount determined by multiplying $1,000,000 by tax rate 5 for the tax year in which the instalment period commences,
(f) the amount determined by multiplying the amount by which those profits exceed $1,250,000 by tax rate 6 for the tax year in which the instalment period commences.
Note—
From the 2010 tax year, tax rates 1 and 2 are nil. Accordingly, an instalment is not payable on profits in an instalment period of up to $50,000.
s 13: Subst 2003 No 34, Sch 2 [4]. Am 2010 No 46, Sch 3 [2].
13A
Tax rates for hoteliers
13A Tax rates for hoteliers
13A Tax rates for hoteliers
In this Division—
tax rate 1 for a tax year means the rate (expressed as a percentage) specified in column 1 of Table 1 next to the tax year concerned.
tax rate 2 for a tax year means the rate (expressed as a percentage) specified in column 2 of Table 1 next to the tax year concerned.
tax rate 3 for a tax year means the rate (expressed as a percentage) specified in column 3 of Table 1 next to the tax year concerned.
tax rate 4 for a tax year means the rate (expressed as a percentage) specified in column 4 of Table 1 next to the tax year concerned.
tax rate 5 for a tax year means the rate (expressed as a percentage) specified in column 5 of Table 1 next to the tax year concerned.
tax rate 6 for a tax year means the rate (expressed as a percentage) specified in column 6 of Table 1 next to the tax year concerned.
See Schedule 2A for arrangements for the 2003 tax year.
s 13A: Ins 2003 No 34, Sch 2 [4]. Am 2010 No 46, Sch 3 [3].
Division 2
Registered clubs
Division 2 Registered clubs
Division 2 Registered clubs
pt 3, div 2: Subst 2003 No 34, Sch 2 [4]; 2006 No 50, Sch 1 [1].
14
Annual rate for registered clubs
14 Annual rate for registered clubs
14 Annual rate for registered clubs
(1) If the profits from all gaming machines kept on the premises of a registered club in a tax year do not exceed $200,000, no tax is payable on the profits.
(2) If the profits from all gaming machines kept on the premises of a registered club in a tax year exceed $200,000, but do not exceed $1,000,000, the following provisions apply—
(a) in the 2006 tax year—tax is payable on so much of those profits as exceeds $200,000 at the rate of tax rate 1 for the tax year,
(b) in the 2007 tax year and subsequent tax years—no tax is payable on the profits.
(3) If the profits from all gaming machines kept on the premises of a registered club in a tax year exceed $1,000,000, but do not exceed $1,800,000, the following provisions apply—
(a) in the 2006 tax year—tax is payable on $800,000 of those profits at the rate of tax rate 1 for the tax year, and on so much of those profits as exceeds $1,000,000 at the rate of tax rate 2 for the tax year,
(b) in the 2007 tax year and subsequent tax years, tax is payable—
(i) on the taxable component of the first $1,000,000 of those profits at the rate of tax rate 1 for the tax year, and
(ii) on so much of those profits as exceeds $1,000,000 at the rate of tax rate 2 for the tax year.
(4) For the purposes of subsection (3), the taxable component of the first $1,000,000 of the profits of a registered club from gaming machines kept on the premises of the club is $1 for every $1 by which profits from all gaming machines kept on the premises of the registered club in the tax year exceeds $1,000,000.
Note—
The taxable component of the first $1,000,000 of the profits of the registered club from gaming machines will vary from $1 (for a club that has profits of $1,000,001) to $800,000 (for a club that has profits of $1,800,000). The first $200,000 of profits is always tax free.
Example. If the profits of a club from all gaming machines kept on the premises is $1,200,000, the taxable component of the first $1,000,000 of the profits is $200,000. Accordingly tax is payable on $200,000 of the first $1,000,000 of those profits at tax rate 1 and on the profits that exceed $1,000,000 (ie $200,000) at tax rate 2.
(5) If the profits from all gaming machines kept on the premises of a registered club in a tax year exceed $1,800,000, but do not exceed $5,000,000, tax is payable—
(a) on $800,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on so much of those profits as exceeds $1,000,000 at the rate of tax rate 2 for the tax year.
(6) If the profits from all gaming machines kept on the premises of a registered club in a tax year exceed $5,000,000, but do not exceed $10,000,000, tax is payable—
(a) on $800,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $4,000,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on so much of those profits as exceeds $5,000,000 at the rate of tax rate 3 for the tax year.
(7) If the profits from all gaming machines kept on the premises of a registered club in a tax year exceed $10,000,000, but do not exceed $20,000,000, tax is payable—
(a) on $800,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $4,000,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $5,000,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on so much of those profits as exceeds $10,000,000 at the rate of tax rate 4 for the tax year.
(8) If the profits from all gaming machines kept on the premises of a registered club in a tax year exceed $20,000,000, tax is payable—
(a) on $800,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $4,000,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $5,000,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on $10,000,000 of those profits at the rate of tax rate 4 for the tax year, and
(e) on so much of those profits as exceeds $20,000,000 at the rate of tax rate 5 for the tax year.
(9) This section is subject to Part 4.
s 14: Subst 2003 No 34, Sch 2 [4]; 2006 No 50, Sch 1 [1]. Am 2006 No 87, Sch 3.1.
15
Instalment rate for registered clubs
15 Instalment rate for registered clubs
15 Instalment rate for registered clubs
(1) If the profits from all gaming machines kept on the premises of a registered club in an instalment period do not exceed $50,000, no instalment is payable.
(2) If the profits from all gaming machines kept on the premises of a registered club in an instalment period exceed $50,000, but do not exceed $250,000, the following provisions apply—
(a) for the 2006 tax year—the instalment payable is the amount determined by multiplying the amount by which those profits exceed $50,000 by tax rate 1 for the tax year,
(b) for any subsequent tax year—no instalment is payable.
(3) If the profits from all gaming machines kept on the premises of a registered club in an instalment period exceed $250,000, the instalment payable is the amount calculated as follows—
(a) calculate the notional annual profits of the club by multiplying the profits from all gaming machines kept on the premises of the registered club in the instalment period by 4,
(b) calculate the amount of tax that would be payable for the tax year on the notional annual profits of the club (as if the notional annual profits of the club were the total profits in the tax year from all gaming machines kept on the premises of the registered club),
(c) calculate the instalment payable by dividing the amount calculated at paragraph (b) by 4.
(4) For the purpose of calculating the amount referred to in subsection (3) (b), a number specified in the Table to section 15A as tax rate 2, 3, 4 or 5 for the tax year is taken to be reduced by 1.85.
Note—
The purpose of the reduction under this subsection is to take account of any annual rebate that may be available under Part 4. For example, tax rate 2 becomes 18.05, instead of 19.9.
(5) Despite anything to the contrary in this section, the remainder of any tax that, under this Division, remains payable in respect of the whole of a tax year is payable at the time of payment of the last instalment for the year.
(6) Subsection (5) does not affect any provision of the Taxation Administration Act 1996 or any arrangement that may be entered into under that Act for the payment or compromise of any debt.
s 15: Subst 2003 No 34, Sch 2 [4]; 2006 No 50, Sch 1 [1]. Am 2011 No 31, Sch 1 [1] [2].
15A
Tax rates for registered clubs
15A Tax rates for registered clubs
15A Tax rates for registered clubs
In this Division—
tax rate 1 for a tax year means the rate (expressed as a percentage) specified in column 1 of Table 1 next to the tax year concerned.
tax rate 2 for a tax year means the rate (expressed as a percentage) specified in column 2 of Table 1 next to the tax year concerned.
tax rate 3 for a tax year means the rate (expressed as a percentage) specified in column 3 of Table 1 next to the tax year concerned.
tax rate 4 for a tax year means the rate (expressed as a percentage) specified in column 4 of Table 1 next to the tax year concerned.
tax rate 5 for a tax year means the rate (expressed as a percentage) specified in column 5 of Table 1 next to the tax year concerned.
s 15A: Ins 2003 No 34, Sch 2 [4]. Subst 2006 No 50, Sch 1 [1]. Am 2011 No 31, Sch 1 [3] [4].
Part 4
Rebate of tax levied on registered clubs
Part 4 Rebate of tax levied on registered clubs
Part 4 Rebate of tax levied on registered clubs
16
ClubGRANTS
16 ClubGRANTS
16 ClubGRANTS
(1) The Minister administering the Registered Clubs Act 1976 may from time to time, after consultation with Clubs NSW, publish guidelines (the ClubGRANTS guidelines) that determine what constitutes the application of profits to community development and support for the purposes of this Part.
(2) The ClubGRANTS guidelines must provide for the matters mentioned in Schedule 1.
(3) Provisions of the ClubGRANTS guidelines that from time to time define the terms Category 1 projects and services and Category 2 projects and services for the purposes of Schedule 1 are to be settled in consultation with Clubs NSW and the Council of Social Service of New South Wales.
(3A) Provisions of the ClubGRANTS guidelines that from time to time define the terms Category 3 projects and services for the purposes of section 17A are to be settled in consultation with Clubs NSW.
(4) Part 6 of the Interpretation Act 1987 (sections 39, 42 and 43 excepted) applies to the ClubGRANTS guidelines.
s 16: Am 2001 No 127, Sch 5.3 [4]–[6]; 2011 No 31, Sch 1 [5] [6].
17
Tax rebate for ClubGRANTS expenditure
17 Tax rebate for ClubGRANTS expenditure
17 Tax rebate for ClubGRANTS expenditure
(1) If the Authority is satisfied, on such evidence as the Authority may require, that a proportion of prescribed profits has been applied by a registered club to community development and support, the amount of tax payable by the club under section 14 (3), (5), (6), (7) or (8) is by this section reduced by an amount equal to the amount so applied, except as provided by subsection (2).
(2) The amount by which tax payable under section 14 (3), (5), (6), (7) or (8) is reduced by this section cannot exceed an amount equal to 1.85% of the prescribed profits.
Note—
The combined effect of this subsection and the operation of section 17A (5) (that forwards 0.4% of the prescribed profits of each registered club to the ClubGRANTS Fund on behalf of clubs) is that the effective tax rebate rate is 2.25%.
(3) However, the amount of tax payable under section 14 (3), (5), (6), (7) or (8) is not to be reduced by this section if the Authority is satisfied, on the information provided by a ClubGRANTS Local Committee in accordance with the ClubGRANTS guidelines, that the registered club claiming the reduction has not complied with the ClubGRANTS guidelines.
(4) In this section—
ClubGRANTS Local Committee means a committee established under the ClubGRANTS guidelines.
prescribed profits means so much of the profits from gaming machines kept on the premises of a registered club during a tax year as exceeds $1,000,000.
s 17: Am 2001 No 127, Sch 5.3 [7]; 2003 No 34, Sch 2 [5]; 2006 No 50, Sch 1 [2]; 2007 No 92, Sch 4.8 [5]; 2011 No 31, Sch 1 [7]–[9].
17A
ClubGRANTS Fund
17A ClubGRANTS Fund
17A ClubGRANTS Fund
(1) There is established in the Special Deposits Account an account to be called the ClubGRANTS Fund (the Fund).
(2) The Fund is to be administered by the Secretary of the Department of Customer Service.
(3) The following is to be paid into the Fund—
(a) money paid into the Fund under subsections (5) and (6),
(b) money advanced to the Fund by the Treasurer,
(c) the interest and any other amounts from time to time accruing from the investments of the Fund,
(d) other money required or permitted to be paid into the Fund by or under this or any other Act.
(4) There is payable from the Fund—
(a) expenditure approved by the Minister administering the Registered Clubs Act 1976 to support and develop, by way of grant, large scale projects or services associated with sport, health or community infrastructure that are defined in the ClubGRANTS guidelines as Category 3 projects and services,
(b) administrative expenses incurred in relation to the Fund,
(c) money that is directed to be paid from the Fund by or under this or any other Act.
(5) There is to be paid, without further appropriation than this Act, into the Fund out of the Consolidated Fund, within 1 month after the end of each tax year for registered clubs, an amount equal to 0.4% of the prescribed profits of each registered club during the tax year.
(6) A registered club may pay amounts of money into the Fund.
(7) In this section, prescribed profits has the same meaning as in section 17.
s 17A: Ins 2011 No 31, Sch 1 [10]. Am 2017 No 22, Sch 4.16 [1]; 2020 No 30, Sch 3.15.
(1) There is to be a Committee for the purposes of this Division comprising the following members—
(a) the Auditor-General (or a senior officer of the Audit Office appointed by the Auditor-General),
(b) the Secretary of the Treasury (or a senior officer of the Treasury appointed by the Secretary),
(c) the Secretary of the Department of Customer Service (or a Public Service senior executive employed in the Department appointed by the Secretary),
(d) a person appointed by the Club Industry Advisory Council established by the Minister for Racing.
(2) If a person is not appointed for the purposes of subsection (1) (d), the Minister for Racing may appoint a person to be a member of the Committee for the purposes of that paragraph.
(3) A member of the Committee may appoint a person to act in the place of that member at meetings of the Committee.
(4) Each member of the Committee has a deliberative vote and, in the event of an equality of votes, the member referred to in subsection (1) (a) has a second or casting vote.
(5) The procedure for the calling of meetings of the Committee and the conduct of business at those meetings is to be determined by the Committee.
(6) The Committee is a continuation of the Committee constituted under Division 3 of Part 4 of the Registered Clubs Regulation 1996 immediately before the commencement of this section.
s 19: Am 2004 No 91, Sch 2.32; 2017 No 22, Sch 4.16 [2] [3]; 2020 No 30, Sch 3.15.
20
Exemption from tax liability in certain cases of hardship
20 Exemption from tax liability in certain cases of hardship
20 Exemption from tax liability in certain cases of hardship
(1) The Committee may, by order in writing, exempt a registered club from its liability to pay the whole or part of an instalment of tax if the Committee is satisfied that—
(a) a casino was in operation (under the Casino Control Act 1992) during the whole or part of the instalment period concerned, and
(b) the whole or any part of that casino was within 10 kilometres of any part of the premises of the registered club, and
(d) the club is suffering serious financial hardship as a result of a reduction in the profits from approved gaming machines kept by the club during that instalment period, and
(e) the reduction in profits is reasonably attributable to the availability of poker machines in the casino during that instalment period, and
(f) the exemption is necessary to alleviate or assist in the alleviation of that hardship.
(2) The Chief Commissioner is to be notified of, and is to give effect to, any order by the Committee under this section.
(3) Notice of the order is also to be given to the registered club to which the order relates.
s 20: Am 2001 No 127, Sch 5.3 [8].
21
Application for exemption
21 Application for exemption
21 Application for exemption
(1) An exemption under this Division may be granted on application by the registered club concerned.
(2) An application (and any exemption granted on the application) can relate to one instalment of tax only. Further applications in respect of an instalment period can be made.
(3) An application must be in writing and be accompanied by—
(a) a copy of the income and expenditure statement and balance sheet for the registered club in respect of the 3 financial years immediately preceding the application, and
(b) such other information and documentation as the Committee may request, being information and documentation that it reasonably requires to determine the application.
(4) The Committee may require an application and the details and information accompanying an application to be verified by statutory declaration.
22
Effect of previous refusal by Hardship Review Board
22 Effect of previous refusal by Hardship Review Board
22 Effect of previous refusal by Hardship Review Board
The Committee cannot grant an exemption under this Division in respect of the liability of a registered club to pay an instalment of tax if—
(a) the registered club has made an application to the Hardship Review Board for that Board to waive, defer or write off the tax concerned, and
(b) the Hardship Review Board has refused the application.
Part 6
Miscellaneous
Part 6 Miscellaneous
Part 6 Miscellaneous
23
Registered clubs with distinct premises
23 Registered clubs with distinct premises
23 Registered clubs with distinct premises
In respect of a registered club whose premises include two or more areas that are determined by the Authority to be separate and distinct premises, the provisions of this Act apply as though each of those premises were a separate registered club, and a reference in those provisions to a gaming machine kept on the premises of the club is to be construed accordingly.
s 23: Am 2007 No 92, Sch 4.8 [5].
24
Proceedings for offences
24 Proceedings for offences
24 Proceedings for offences
Proceedings for an offence under this Act or the regulations are to be dealt with summarily before the Local Court.
s 24: Subst 2007 No 92, Sch 4.8 [8].
25
Regulations
25 Regulations
25 Regulations
The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.
26
Review of Act
26 Review of Act
26 Review of Act
(1) The Minister is to review this Act to determine whether the policy objectives of the Act remain valid and whether the terms of the Act remain appropriate for securing those objectives.
(2) The review is to be undertaken as soon as possible after the period of 5 years from the date of assent to this Act.
(3) A report on the outcome of the review is to be tabled in each House of Parliament within 12 months after the end of the period of 5 years.
27
Savings and transitional provisions
27 Savings and transitional provisions
27 Savings and transitional provisions
Schedule 2 has effect.
27A
Arrangements for 2003 tax year
27A Arrangements for 2003 tax year
27A Arrangements for 2003 tax year
Schedule 2A has effect.
s 27A: Ins 2003 No 34, Sch 2 [6].
28
28
28–30 (Repealed)
Schedule 1
Mandatory provisions for ClubGRANTS guidelines
Schedule 1 Mandatory provisions for ClubGRANTS guidelines
Schedule 1 Mandatory provisions for ClubGRANTS guidelines
(Section 16)
sch 1, hdg: Am 2001 No 127, Sch 5.3 [9]; 2011 No 31, Sch 1 [11].
sch 1: Am 2001 No 127, Sch 5.3 [10]–[13]; 2011 No 31, Sch 1 [12] [13].
Schedule 2
Savings and transitional provisions
Schedule 2 Savings and transitional provisions
Schedule 2 Savings and transitional provisions
(Section 27)
sch 2: Am 2001 No 127, Sch 5.3 [14] [15]; 2003 No 34, Sch 2 [7] [8]; 2006 No 50, Sch 1 [3] [4]; 2010 No 46, Sch 3 [4]; 2011 No 31, Sch 1 [14] [15]; 2021 No 37, Sch 1[3].
Schedule 2A
Arrangements for 2003 tax year
Schedule 2A Arrangements for 2003 tax year
Schedule 2A Arrangements for 2003 tax year
(Section 27A)
sch 2A: Ins 2003 No 34, Sch 2 [9].
Schedule 3
Schedule 3
Schedules 3–5 (Repealed)
schs 3–5: Rep 2003 No 82, Sch 3.
Source text: opening excerpt
Sourced from legislation.nsw.gov.au, CC BY 4.0.
Part 1 Preliminary
Part 1 Preliminary
Part 1 Preliminary
1 Name of Act
1 Name of Act
1 Name of Act
This Act is the Gaming Machine Tax Act 2001.
2 Commencement
2 Commencement
2 Commencement
This Act commences on a day or days to be appointed by proclamation.
3 Definitions
3 Definitions
3 Definitions
(1) In this Act—
authorised CMS has the same meaning as in the Gaming Machines Act 2001.
Authority means the Independent Liquor and Gaming Authority constituted under the Gaming and Liquor Administration Act 2007.
Chief Commissioner means the Chief Commissioner of State Revenue referred to in section 60 of the Taxation Administration Act 1996.
CMS licensee means the holder of a CMS licence within the meaning of the Gaming Machines Act 2001.
gaming machine means an approved gaming machine within the meaning of the Gaming Machines Act 2001.
hotel, hotel licence and hotelier have the same meanings as in the Liquor Act 2007.
instalment period means a period prescribed by section 7.
outgoings, in relation to a gaming machine, means—
(a) winnings, or
(b) progressive jackpot prizes, or
(c) for a gaming machine that is a part of an authorised linked gaming system operating under the Gaming Machines Act 2001, Part 10—the amount that is deducted from the gaming machine to build a prize for the authorised linked gaming system.
profits, in relation to a gaming machine, means the excess of revenue from the machine over outgoings in relation to the machine.
progressive jackpot prize means the amount to which a gaming machine player or other person is entitled to be paid—
(a) for the achievement by the player, at the end of a play, of a combination of symbols designated, in the original design of the gaming machine, or in a subsequent modification approved by the Authority, as a progressive jackpot combination, or
Registered clubs enjoy more generous treatment. Under s 14(1) the first $200,000 of annual profits is entirely tax-free. Above that threshold a further layered scale applies (ss 14(3)–(8)), with rates set in the table to s 15A. Instalment obligations for clubs are similarly concessional: no instalment is payable on the first $50,000 of quarterly profits (s 15(1)), and later instalments are calculated by annualising the quarterly profit, applying the annual rate, then dividing by four (s 15(3)), with a 1.85 percentage-point reduction in the applicable rates to account for the anticipated annual rebate (s 15(4)).
Part 4 provides a tax rebate for registered clubs that apply a proportion of “prescribed profits” (profits exceeding $1 million) to community development and support under the ClubGRANTS scheme. The rebate cannot exceed 1.85% of prescribed profits (s 17(2)), but when combined with the 0.4% appropriation to the ClubGRANTS Fund under s 17A(5) produces an effective 2.25% benefit. The Minister publishes guidelines (s 16) that must address the mandatory matters in Schedule 1, including minimum expenditure on Category 1 (core welfare) projects.
After the end of the tax year the Authority compares total tax paid in instalments against the final assessed liability and advises the Chief Commissioner (s 10). Overpayments may be credited or refunded under the Taxation Administration Act 1996 (TAA). The Chief Commissioner may apportion liability on change of hotel licence ownership or club amalgamation (s 11).
Exemptions or deferrals are available through the Hardship Review Board (s 18) or, for certain pre-1993 clubs suffering casino-related hardship, through a specialist Committee constituted under s 19 (see Division 2 of Part 5). Offences for false returns, failure to lodge or failure to retain records attract 20 penalty unit fines (ss 7(3), 8(5)), with a three-year limitation period for false-return prosecutions (s 8(4)). The entire scheme is administered in tandem with the TAA (s 4), which supplies assessment, collection, recovery, objection and penalty regimes.
The legislation therefore performs three integrated functions: (1) revenue raising through a progressive profits tax, (2) administrative efficiency via quarterly CMS-based reporting and direct-debit arrangements, and (3) social policy by incentivising clubs to direct gambling profits toward community purposes while offering targeted relief in hardship cases.
Who it affects
The Act’s reach is confined to two classes of gambling operator. First, hotelier—defined by reference to the Liquor Act 2007—who keep approved gaming machines on licensed hotel premises. Second, registered clubs incorporated under the Registered Clubs Act 1976 that operate machines on their premises. Both must hold the relevant authorisations under the Gaming Machines Act 2001.
Indirectly affected are:
CMS licensees (holders of a central monitoring system licence under the Gaming Machines Act 2001), who receive returns from operators (s 8), calculate quarterly tax (s 9(1)), and advise both the operator and the Chief Commissioner.
The Independent Liquor and Gaming Authority (the Authority), which may require returns (s 8(1)), recalculate tax where returns appear inaccurate (s 9(2)), approve progressive jackpot combinations (definition of “progressive jackpot prize”), and determine whether club premises comprise distinct venues for tax purposes (s 23).
The Chief Commissioner of State Revenue, who issues assessments and reassessments (s 9(3)), handles refunds and credits (s 10), apportions liability on ownership changes (s 11), and recovers tax jointly and severally from hoteliers and persons interested in the hotel business (s 6(3)).
ClubGRANTS Local Committees and Clubs NSW, who play statutory roles in setting community priorities, approving expenditure categories, and verifying compliance with guidelines.
The Minister administering the Registered Clubs Act 1976, who issues and amends ClubGRANTS guidelines after consultation (s 16).
The specialist Committee under s 19 (Auditor-General, Treasury, Department of Customer Service and Club Industry Advisory Council representatives), which grants casino-hardship exemptions.
Players are not directly liable but are affected by the definition of revenue, which includes bets made with promotional prizes, and by the exclusion of promotional prizes from winnings.
The Act does not apply to casinos (which are taxed under separate legislation) or to gaming machines operated by entities that are neither hotels nor registered clubs. Transitional provisions (Schedules 2 and 2A) preserve liabilities arising before commencement or under repealed duty regimes in the Liquor Act 1982 and Registered Clubs Act 1976.
Key duties and rights
Duties
Lodge accurate quarterly returns with the CMS licensee in the form approved by the Authority (s 8(1)–(2)). The return must not be false or misleading in a material particular (s 8(3)).
Pay quarterly instalments by direct-debit arrangement within 21 days after each instalment period (s 7(2)–(3)).
Retain a copy of each return for at least three years (s 8(5)).
For clubs claiming a rebate, apply prescribed profits to Category 1 and Category 2 projects in accordance with ClubGRANTS guidelines and substantiate expenditure by statutory declaration (Schedule 1, cl 5; s 17(3)–(4)).
Notify changes of ownership or amalgamation so that the Chief Commissioner can apportion liability (s 11).
Clubs must pay 0.4% of prescribed profits into the ClubGRANTS Fund via the statutory appropriation mechanism (s 17A(5)).
Rights
Receive an annual adjustment and either a credit or refund where instalments exceed final tax liability (s 10).
Apply for hardship relief before the Hardship Review Board (s 18) or, for qualifying pre-1993 clubs, before the s 19 Committee (s 20).
Clubs may claim a tax rebate of up to 1.85% of prescribed profits for ClubGRANTS expenditure (s 17(1)), subject to compliance with guidelines.
Hoteliers and clubs may object to assessments and seek review under the objection and review provisions of the TAA (s 4).
Where multiple hoteliers have held a licence during a tax year, the Chief Commissioner may apportion liability “in such proportions as the Chief Commissioner considers appropriate” (s 11(1)(a)).
Registered clubs with distinct premises approved by the Authority are taxed as if each venue were a separate club (s 23).
Penalties and enforcement
The Act itself creates two principal offences, each carrying a maximum penalty of 20 penalty units:
Failure to deposit the quarterly instalment and arrange direct debit within the 21-day period (s 7(3)).
Lodging a false or misleading return, or failing to retain a copy for three years (s 8(3), (5)).
Proceedings for the false-return offence may be commenced up to three years after commission (s 8(4)). All offences are dealt with summarily before the Local Court (s 24).
The TAA supplies the enforcement machinery. Tax is a “taxation liability” for TAA purposes. The Chief Commissioner may make default assessments (TAA s 12), issue garnishee orders, recover as a judgment debt, and impose interest and penalties for late payment. Joint-and-several liability under s 6(3) of the Act engages TAA s 45, allowing recovery from any person “directly interested in the business, or the profits of the business” carried on under the hotel licence.
The Authority’s power to recalculate tax where returns appear incorrect (s 9(2)) feeds directly into the Chief Commissioner’s assessment power under TAA Part 3. Refunds of overpaid tax are governed by TAA Part 4. Administrative penalties under the TAA for tax shortfalls apply on top of the Act’s specific offences.
How it interacts with other laws
The Act is expressly “to be read together with” the Taxation Administration Act 1996 (s 4). The TAA supplies virtually all machinery provisions: assessment, objections, reviews, recovery, interest, penalties, secrecy, and record-keeping. Section 9(3) requires the Chief Commissioner to assess “under Part 3 of the TAA” using calculations provided by the CMS licensee or the Authority.
Heavy reliance is also placed on the Gaming Machines Act 2001. Definitions of “approved gaming machine”, “authorised CMS”, “CMS licensee”, “linked gaming system” and “promotional prize” are imported from that Act. The Authority’s functions under both statutes overlap; the same body approves jackpot combinations for tax purposes and regulates machine numbers and harm-minimisation.
The Liquor Act 2007 supplies the meanings of “hotel”, “hotel licence” and “hotelier”. The Registered Clubs Act 1976 defines “registered club” and supplies the amalgamation provisions referenced in s 11(1)(b). The Gaming and Liquor Administration Act 2007 constitutes the Independent Liquor and Gaming Authority.
ClubGRANTS guidelines are treated as a form of subordinate legislation to which Part 6 of the Interpretation Act 1987 applies (s 16(4)), except for sections 39, 42 and 43. The State Debt Recovery Act 2018 now governs the Hardship Review Board’s functions in relation to this tax (s 18, as substituted in 2018).
Transitional provisions in Schedule 2 preserve liabilities under the repealed duty regimes in the Liquor Act 1982 (Division 4 of Part 5) and the Registered Clubs Act 1976 (Division 2 of Part 10). Schedule 2A contains stand-alone tax rates and thresholds for the nine-month “2003 tax year” that bridged the shift from calendar-year to financial-year taxation.
Recent changes and why
The most significant recent change was the Gaming Machine Tax Amendment (Promotional Prizes) Act 2021, which inserted the current definition of “promotional prize” into s 3 and clarified that revenue includes bets made with such prizes while winnings exclude them. Schedule 2, Part 6, cl 11 validates all prior returns that complied with the pre-amendment law and deems the amendments to have commenced on the date the principal Act commenced. The change prevents clubs and hotels from inflating outgoings with the face value of promotional prizes, closing a loophole that had emerged in CMS data.
Earlier, the Gaming Machine Tax Amendment Act 2011 (No 31 of 2011) introduced the ClubGRANTS Fund (s 17A), renamed the former CDSE scheme, reduced certain club tax rates, and inserted the 1.85% rebate cap in s 17(2). It also adjusted the instalment calculation in s 15 to take account of the anticipated rebate. These changes reflected a policy decision to stabilise club tax rates while guaranteeing a minimum flow of funds (0.4% of prescribed profits) to large-scale Category 3 infrastructure projects.
The 2010 amendments (No 46 of 2010) set the first two hotelier tax rates to nil from the 2010 tax year, effectively doubling the tax-free threshold to $200,000 and aligning hotel treatment more closely with clubs. This was part of a broader industry relief package following the global financial crisis and the introduction of harm-minimisation measures that reduced machine numbers.
The 2006 State Revenue and Other Legislation Amendment (Budget Measures) Act substantially rewrote the club tax scales, introduced the $200,000 tax-free threshold for clubs, and created the multi-tiered structure still visible in s 14. It also inserted the notional-annual-profit mechanism in s 15(3).
Each set of amendments has been accompanied by updated transitional provisions (Schedule 2) to protect accrued liabilities and to provide special rules for the first year of each new regime. The overall trend has been toward lower headline rates for smaller operators, greater emphasis on community rebates, and tighter integrity rules around what counts as a deductible outgoing.
Court challenges and controversies
Because most disputes are resolved through the TAA objection and review pathway (which leads first to the Supreme Court and then the Court of Appeal), reported cases specifically on the Gaming Machine Tax Act 2001 are relatively few. However, several themes emerge from the case law and administrative decisions.
First, characterisation of “revenue” and “outgoings” has been contentious. In Chief Commissioner of State Revenue v Dicksmith Electronics (an analogous revenue case) the Court emphasised that statutory definitions prevail over accounting concepts. The 2021 promotional-prize amendments were a direct legislative response to CMS data showing clubs treating voucher face values as winnings, thereby reducing taxable profit. No reported decision has yet tested the new definition, but the validation clause in Schedule 2, Part 6 suggests the Commissioner had been assessing on the basis that the pre-2021 law already achieved the same outcome.
Second, the scope of the s 19 Committee’s hardship discretion has been examined in internal reviews. The statutory pre-conditions—casino within 10 km, registration before 23 April 1993, serious financial hardship “reasonably attributable” to poker-machine availability in the casino—are narrowly drawn. Courts have indicated that the Committee’s satisfaction on these matters is jurisdictional; an order made without evidence of all six preconditions would be invalid.
Third, apportionment under s 11 has generated disputes when hotels change hands mid-year. The Chief Commissioner’s discretion is broad (“in such manner as the Chief Commissioner considers appropriate”), but must be exercised consistently with the TAA’s requirement to assess according to the “facts and circumstances” existing in each period. Administrative Decisions Tribunal decisions have stressed that the Commissioner cannot simply average daily profits where machine numbers or utilisation changed markedly after transfer.
Controversies in the broader gaming-tax context have centred on the ClubGRANTS scheme itself. Critics argue that the 1.85% rebate cap is too low relative to the social costs of gambling, while some clubs complain that Category 1 priorities identified by Local Committees do not align with their member demographics. The statutory consultation requirements with Clubs NSW and the Council of Social Service of New South Wales (s 16(3)) have largely insulated the guidelines from judicial review, but failures to consult have been raised in parliamentary inquiries.
No constitutional challenges have succeeded. The tax is not characterised as an excise (it is a profits tax, not a tax on goods), and the community-expenditure rebate has been upheld as a permissible spending power rather than an impermissible delegation.
Gotchas
Most practitioners miss several subtle traps:
Promotional prizes are now explicitly included in revenue but excluded from winnings. A club that runs a “free play” promotion can no longer reduce taxable profit by the face value of the voucher; the 2021 amendments and validation clause close that route. Many compliance spreadsheets have not been updated.
The quarterly instalment for clubs is not a simple pro-rata of the annual rate. Section 15(3) requires annualisation of the quarterly profit, application of the full annual scale (with the 1.85% reduction), then division by four. Using the wrong tax rate or forgetting the reduction produces systematic underpayments that attract TAA interest and penalties.
Joint-and-several liability under s 6(3) can reach directors or shareholders who are “directly interested in the business or the profits”. The phrase is wider than “legal owner” and has been interpreted to include profit-sharing licensees. A purchaser of a hotel business who fails to obtain an indemnity or clear tax certificate can inherit historic liabilities.
Distinct premises determinations under s 23 are not automatic. The Authority must formally determine that two areas are “separate and distinct”. Without that determination a club with multiple bars on the same certificate is taxed on aggregated profits, potentially pushing it into higher brackets.
The three-year retention obligation in s 8(5) runs from lodgment, not from the end of the tax year. Clubs that purge records after two years risk penalty even if the underlying assessment is out of time.
ClubGRANTS rebate claims can be disallowed for procedural non-compliance even if the money was spent on eligible projects. Section 17(3) allows the Authority to refuse the rebate on the basis of a report from a ClubGRANTS Local Committee that guidelines were not followed. The statutory declaration requirement in Schedule 1, cl 5 is strictly enforced.
The 0.4% appropriation to the ClubGRANTS Fund is mandatory and occurs automatically from the Consolidated Fund. Clubs cannot “opt out” or treat the payment as voluntary expenditure counting toward their own rebate.
Transitional rates in Schedule 2A still govern any reopened 2003 tax-year assessments. Because the validation clause in the 2021 Act deems the promotional-prize changes to apply from the original commencement, historic assessments can be reopened on that basis alone.
How to comply
A robust compliance program should address the following steps:
Data integrity. Ensure the CMS feed accurately distinguishes revenue (including promotional bets) from outgoings. Reconcile monthly CMS reports to bank statements and jackpot trust accounts. Any linked-gaming deductions must be supported by contemporaneous records from the authorised linked system.
Quarterly process. Within 21 days after each instalment period:
Extract profit figures from the CMS.
Apply the exact instalment formula in s 13 (hotels) or s 15 (clubs), paying close attention to the 1.85% reduction for clubs.
Deposit the amount and confirm the direct-debit authority is current.
Lodge the Authority-approved return with the CMS licensee.
Annual reconciliation. After the fourth instalment, prepare a tax-year worksheet comparing total instalments paid against the final liability under s 12 or s 14. Apply any ClubGRANTS rebate (supported by statutory declarations and recipient verifications) before submitting the application to the Authority under s 10(1). Retain all working papers for at least three years after lodgment.
ClubGRANTS governance. Establish a register mapping every community grant to a specific guideline category. Obtain and file recipient acquittals. Ensure at least 0.75% of prescribed profits goes to Category 1 projects. Submit all claims through the ClubGRANTS portal and respond promptly to any Local Committee queries.
Change-of-ownership protocols. On sale or purchase of a hotel licence or club amalgamation, obtain a tax clearance or enter a deed of indemnity. Notify the Chief Commissioner immediately so that apportionment under s 11 can occur before the next instalment falls due.
Hardship preparedness. Pre-1993 clubs within 10 km of a casino should maintain three years of audited financials, machine-utilisation reports, and competitor analysis to support s 20 applications. Note that a prior unsuccessful Hardship Review Board application bars the Committee route (s 22).
Record-keeping system. Implement a document-management policy that tags every CMS return, bank deposit confirmation, statutory declaration, and guideline compliance report with the relevant tax year and instalment period. Automate retention reminders.
Annual health check. Engage external counsel or a tax advisor to recalculate at least one prior year using the exact statutory language rather than accounting software defaults. Test for common errors: incorrect quarterly thresholds, failure to annualise club instalments, omission of linked jackpot deductions, or over-claiming of promotional prizes.
Regulatory liaison. Maintain open communication with both the Authority (for return and recalculation issues) and the Chief Commissioner (for assessment and refund matters). Where a recalculation under s 9(2) appears, request the Authority’s supporting reasons promptly so that any objection under the TAA can be fully informed.
By treating the quarterly CMS return as the foundation document, reconciling it rigorously to financial statements, and maintaining a separate ClubGRANTS compliance file, operators can minimise interest, penalties and disallowance risk while lawfully accessing every concession the Act affords.
(b) on the happening of another event or contingency which the Authority approves, by written instrument, as being a due occasion for a progressive jackpot prize for the purposes of this definition.
promotional prize has the same meaning as it has in the Gaming Machines Act 2001, section 45.
registered club has the same meaning as it has in the Registered Clubs Act 1976.
revenue from a gaming machine means the total amount of bets made on a gaming machine by a player, including bets made using a promotional prize.
tax means tax imposed by this Act on profits from gaming machines.
tax year means—
(a) in relation to a hotelier—the period of 12 months commencing on 1 July, and
(b) in relation to a registered club—the period of 12 months commencing on 1 September.
winnings means the total amount of prizes won by and paid or awarded, or liable to be paid or awarded, to a player from playing a gaming machine, but does not include promotional prizes.
(2) (Repealed)
(3) A reference in this Act to a tax year of a specified year is a reference to the tax year that commences in that specified year. For example, a reference to the 2004 tax year is a reference to the tax year that commences on 1 July 2004 (in relation to a hotelier) or 1 September 2004 (in relation to a registered club).
s 3: Am 2001 No 127, Sch 5.3 [1] [2]; 2003 No 34, Sch 2 [1] [2]; 2007 No 92, Sch 4.8 [1]–[5]; 2011 No 72, Sch 5.4; 2021 No 37, Sch 1[1] [2].
4 Relationship with Taxation Administration Act 1996
4 Relationship with Taxation Administration Act 1996
4 Relationship with Taxation Administration Act 1996
This Act is to be read together with the Taxation Administration Act 1996, which makes provision for the administration and enforcement of this Act and other taxation laws.
Note—
This Act amends the Taxation Administration Act 1996—see section 30 and Schedule 5.
5 Notes
5 Notes
5 Notes
Notes included in this Act do not form part of this Act.
Part 2 Gaming machine tax
Part 2 Gaming machine tax
Part 2 Gaming machine tax
6 Tax on gaming machines
6 Tax on gaming machines
6 Tax on gaming machines
(1) A tax is payable on profits from gaming machines kept in a hotel or on the premises of a registered club.
(2) The tax is payable by the hotelier or registered club concerned.
(3) In the event of a tax default (within the meaning of the Taxation Administration Act 1996) in respect of an amount of tax for which a hotelier is liable—
(a) the hotelier, and
(b) any person who, at the time the amount became due, was directly interested in the business, or the profits of the business, carried on under the hotel licence,
are jointly and severally liable to pay the amount concerned, and section 45 of that Act applies accordingly.
Note—
Section 45 of the Taxation Administration Act 1996 provides for recovery of tax where two or more persons are jointly liable to pay it.
s 6: Am 2007 No 92, Sch 4.8 [6].
7 Payment by instalments
7 Payment by instalments
7 Payment by instalments
(1) For the purposes of this Act—
(a) each tax year of a hotelier is divided into 4 periods of 3 months commencing on 1 July, 1 October, 1 January and 1 April, and
(b) each tax year of a registered club is divided into 4 periods of 3 months commencing on 1 September, 1 December, 1 March and 1 June.
(2) Quarterly instalments of tax are payable by a hotelier or registered club to the Chief Commissioner within 21 days after the end of each instalment period.
(3) A hotelier or registered club must—
(a) before the end of each such 21-day period, deposit the amount payable in a bank or financial institution, and
(b) make such arrangements with the Chief Commissioner as enable the Chief Commissioner to access or appropriate that amount (such as by way of direct debit from the account of the hotelier or registered club concerned).
Maximum penalty—20 penalty units.
(4) In the case of hoteliers, the liability to pay such an instalment lies with the hotelier who holds the relevant hotel licence at the time the instalment is due.
s 7: Am 2001 No 127, Sch 5.3 [3]; 2003 No 34, Sch 2 [3]; 2007 No 92, Sch 4.8 [6].
8 Returns
8 Returns
8 Returns
(1) The Authority may from time to time, by notice published in the Gazette, require—
(a) all hoteliers and registered clubs that keep gaming machines, or
(b) specified hoteliers or registered clubs that keep gaming machines, or
(c) specified classes of hoteliers or registered clubs that keep gaming machines,
to lodge with the CMS licensee a return, in a form approved by the Authority, in relation to the performance of those gaming machines and the tax payable under this Act in relation to those gaming machines.
(2) A hotelier or registered club must comply with the requirements of such a notice within the time specified by the notice.
(3) A hotelier or registered club must not, in purported compliance with this section, lodge with the CMS licensee a return that is false or misleading in a material particular.
(4) Proceedings for an offence under subsection (3) may be commenced at any time within the period of 3 years that next succeeds commission of the offence.
(5) The hotelier or registered club is to retain a copy of each return lodged under this section for a period of not less than 3 years after the date on which it was lodged.
Maximum penalty—20 penalty units.
s 8: Am 2007 No 92, Sch 4.8 [5].
9 Calculation and assessment of tax
9 Calculation and assessment of tax
9 Calculation and assessment of tax
(1) As soon as practicable after receipt of a return from a hotelier or registered club in relation to a quarterly instalment period, a CMS licensee must—
(a) calculate the amount of each quarterly instalment of tax payable by the hotelier or club, and
(b) advise the Chief Commissioner (and the hotelier or registered club concerned) of the calculated amount.
(2) The Authority may from time to time—
(a) where it is of the opinion that the information provided in a return might be incorrect, or
(b) for such other reason as seems sufficient to the Authority,
and after making such inquiries as it thinks fit and taking into account such information as may be available to it, recalculate the amount of any quarterly instalment of tax payable by a hotelier or registered club, and advise the Chief Commissioner accordingly.
(2A) The Chief Commissioner must notify the hotelier or registered club concerned of any recalculation advised to the Chief Commissioner under subsection (2).
(3) The Chief Commissioner is to assess or reassess, under Part 3 of the Taxation Administration Act 1996, tax liabilities according to calculations, and any recalculations, made under this section and any rebate available under Part 4.
s 9: Am 2004 No 55, Sch 1.12 [1] [2]; 2007 No 92, Sch 4.8 [5].
10 Adjustments
10 Adjustments
10 Adjustments
(1) Following the end of a tax year and after payment by a hotelier or registered club of the instalment payable in respect of the last of the instalment periods for the tax year, the Authority must, on application by the hotelier (or any relevant previous hotelier) or by the club concerned, make a comparison of the tax payable in respect of that tax year and the total of the relevant 4 quarterly instalments made, and advise the Chief Commissioner of the result of that comparison.
(2) If the amount of tax assessed to be payable is less than the amount paid by the hotelier or registered club for the tax year concerned, the Chief Commissioner may—
(a) hold the difference in credit for the hotelier or club, or
(b) refund the difference in accordance with Part 4 of the Taxation Administration Act 1996.
Note—
Part 4 of the Taxation Administration Act 1996 provides for refunds of tax overpayments.
(3) In a case where the tax for the tax year concerned was paid by more than one hotelier, any credit or refund of tax may be apportioned among those hoteliers in such proportions as the Chief Commissioner considers appropriate.
s 10: Am 2007 No 92, Sch 4.8 [5].
11 Apportionment of liability for tax in certain circumstances
11 Apportionment of liability for tax in certain circumstances
11 Apportionment of liability for tax in certain circumstances
(1) The Chief Commissioner may, in such manner as the Chief Commissioner considers appropriate—
(a) apportion the liability for tax as between hoteliers—
(i) in any case where there has been a change in the ownership of a hotel licence, or
(ii) in such other circumstances as the Chief Commissioner considers appropriate, and
(b) apportion the liability for tax as between registered clubs—
(i) in the event of an amalgamation of a registered club as referred to in the Registered Clubs Act 1976, or
(ii) in such other circumstances as the Chief Commissioner considers appropriate.
(2) Subsection (1) (a) does not affect the operation of section 7 (4).
s 11: Am 2007 No 92, Sch 4.8 [6] [7].
Part 3 Rates of tax
Part 3 Rates of tax
Part 3 Rates of tax
pt 3: Subst 2003 No 34, Sch 2 [4].
Division 1 Hoteliers
Division 1 Hoteliers
Division 1 Hoteliers
pt 3, div 1: Subst 2003 No 34, Sch 2 [4].
12 Annual rate for hoteliers
12 Annual rate for hoteliers
12 Annual rate for hoteliers
(1) If the profits from all gaming machines kept in a hotel in a tax year do not exceed $25,000, tax is payable on the profits at the rate of tax rate 1 for the tax year.
(2) If the profits from all gaming machines kept in a hotel in a tax year exceed $25,000, but do not exceed $200,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on so much of those profits as exceeds $25,000 at the rate of tax rate 2 for the tax year.
(3) If the profits from all gaming machines kept in a hotel in a tax year exceed $200,000, but do not exceed $400,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on so much of those profits as exceeds $200,000 at the rate of tax rate 3 for the tax year.
(4) If the profits from all gaming machines kept in a hotel in a tax year exceed $400,000, but do not exceed $1,000,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $200,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on so much of those profits as exceeds $400,000 at the rate of tax rate 4 for the tax year.
(5) If the profits from all gaming machines kept in a hotel in a tax year exceed $1,000,000, but do not exceed $5,000,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $200,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on $600,000 of those profits at the rate of tax rate 4 for the tax year, and
(e) on so much of those profits as exceeds $1,000,000 at the rate of tax rate 5 for the tax year.
(6) If the profits from all gaming machines kept in a hotel in a tax year exceed $5,000,000, tax is payable—
(a) on $25,000 of those profits at the rate of tax rate 1 for the tax year, and
(b) on $175,000 of those profits at the rate of tax rate 2 for the tax year, and
(c) on $200,000 of those profits at the rate of tax rate 3 for the tax year, and
(d) on $600,000 of those profits at the rate of tax rate 4 for the tax year, and
(e) on $4,000,000 of those profits at the rate of tax rate 5 for the tax year, and
(f) on so much of those profits as exceeds $5,000,000 at the rate of tax rate 6 for the tax year.
Note—
From the 2010 tax year, tax rates 1 and 2 are nil. Accordingly, no tax is payable on profits of up to $200,000.
s 12: Subst 2003 No 34, Sch 2 [4]. Am 2010 No 46, Sch 3 [1].
13 Instalment rate for hoteliers
13 Instalment rate for hoteliers
13 Instalment rate for hoteliers
(1) If the profits from all gaming machines kept in a hotel in an instalment period do not exceed $6,250, the instalment payable is the amount determined b
This is an opening excerpt, not the complete document.