The clubs failed to disclose their pokie profits, staff pay packets and travel spends.
Two of NSW’s largest pokie clubs have been found to have breached financial disclosure rules, following an investigation prompted by SBS News.
The independent gaming regulator has issued penalty notices against Mounties and Rooty Hill RSL, both in Sydney’s western suburbs, for failing to provide an SBS News journalist with details about their gaming profits.
As revealed in an SBS News investigation in February, registered clubs in one of the most disadvantaged parts of Sydney were using millions made from poker machines to bankroll lucrative executive salaries and overseas staff travel.
The clubs, including Fairfield RSL, Cabra-Vale Diggers and Dooleys Lidcombe Catholic Club, are required by law to provide such financial information when requested in writing by a club member.
But Mounties and Rooty Hill refused to do so after granting an SBS News journalist a provisional membership. The membership was cancelled after the disclosures were requested.
Liquor and Gaming NSW told SBS News on Thursday it had imposed an $1,100 penalty on each club to “send a message” that transparency was fundamental to good governance and public confidence.
The information requested by the journalist "should be provided to her given that she was legally entitled to it at the time of the written request, even though her applications for full membership of both clubs were subsequently rejected," a spokesman said.
The regulator was "liaising with both clubs and have requested that they provide the outstanding information," he said.
“The profile of the clubs as very large and sophisticated enterprises with significant revenue and means to access independent professional advice heightens the expectation and need for transparency and compliance."
Rooty Hill RSL also rejected a request from a second SBS News journalist, citing an unspecified error in his membership application form after he lodged the same written disclosure request.
Mounties later provided its disclosures to the second SBS News journalist before similarly cancelling his provisional membership.
Separately, the clubs rejected the membership of a Sydney Morning Herald journalist who lodged the same requests.
All three journalists were banned from Mounties.
These documents revealed Mounties made almost $113 million in pre-tax pokie profit - or player losses - in the year to August 2016. The club’s top executive took home a total remuneration package worth up to $710,000 in the financial year ending June that year.
Asked if they would like to comment about the regulator’s sanction on Thursday, Mounties chief executive Greg Pickering and Rooty Hill's chief executive Richard Errington both said: “No thanks”.
But the regulator’s action was welcomed by the Alliance for Gambling Reform, which said there was a “culture of secrecy” among the large gambling clubs in NSW.
“The attempts to reject membership applications by journalists reflect poorly on Mounties and the Rooty Hill RSL," the alliance’s deputy chair Allison Keogh said.
Clubs "inflict enormous damage on communities, yet dodge scrutiny on basic governance matters and perks for directors," she said.
“The next NSW government needs to implement sweeping reforms and embrace transparency across the board, including disclosure of pokies losses per venue, which has happened in Victoria for many years."
The official censure comes amid sustained criticism of the Australian clubs sector’s reliance on gaming despite its associated community harms - highlighted recently by the suicide of problem gambler Gary Van Duinen, who lost hundreds of thousands at Dee Why RSL.
The industry’s peak body, Clubs NSW, has been approached for comment.