www.news.com.auONE of Australia's biggest league clubs, Souths Juniors, has lost its tax-free status after a tribunal found its main activity was gambling rather than sport.
The Administrative Appeals Tribunal revoked Souths Juniors' income tax exemption last week, The Australian Financial Review reported today.
The court decided its operation of a "miniature Las Vegas" overtook its support for junior rugby league or the NRL's South Sydney Rabbitohs.
Souths Juniors has assets of $43 million and provides substantial activities to members including 545 poker machines, free shows and $5 steaks, the newspaper said. It also has 21 holiday units, a hotel, two gyms, and interest in a golf course and a catamaran cruiser.
The decision, which is a victory for the taxman, could affect 3000 clubs nationwide as it threatens the privileged tax status of the clubs industry.
"We are closely examining the ruling in regard to Souths Juniors and it potential to create a worrying precedent for more than 3000 sporting clubs across Australia," Clubs Australia chief David Costello told the newspaper.
Souths Juniors said 80 per cent of its profits, or $4.6 million in 2003, was distributed to the junior league and Rabbitohs.
But the tribunal said sporting donations accounted for only 34 per cent of profits.
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