$220 million in prizes given away, but critics call these "subscription clubs" a gambling loophole.
More than 80 rewards clubs across Australia operate on a model where customers pay a monthly subscription for entries into prize draws for cars, houses, and cash. Collectively, they claim to have given away over $220 million in prizes.
The industry is largely unregulated, relying on trade promotion permits intended for promoting a product or service—not as the product itself. Gambling licenses are costly and hard to obtain, while trade promotion permits cost around $500 annually.
Key Details
- Rewards clubs offer various prizes, including luxury goods, hunting equipment, and construction machinery.
- The clubs rely on trade promotion permits, which require free entry into draws.
- In New South Wales, trade promotions constitute over 80% of gaming-related complaints to the Department of Fair Trading, with over 60 complaints in the last financial year.
- Director Andreas Fung of Trade Promotions and Lotteries stated that these operations are either gambling or charity raffles, not legal giveaways.
- A NSW minister expressed concern about the increase in complaints.
Enforcement Issues
- RS Rewards had its permit cancelled in March 2025 after 29 breaches of the law, but continued to run draws.
- LMCT+, operating for nearly 10 years, was fined $40,000 in March for running an unlawful lottery.
- Age verification is generally absent, allowing under-18s to sign up, though they are ineligible to win.
Expert Opinions
"Regulators struggle to prove businesses are not conducting a genuine promotion." — Lawyer Emma Tiberi
- Senator David Pocock called for stronger regulation, highlighting that Australians are the biggest per capita gambling losers.
- Expert Kei Sakata warned of lack of transparency, no self-exclusion tools, and potential consumer harm.
Background
Adrian Portelli ("Lambo Guy"), founder of LMCT+, stated his company aims for genuine value but supports stricter laws. He described competitors as "cowboys." The ABC identified that many subscribers enter draws hoping to pay off debts or medical bills.