Revenue generated by Returned Service League (RSL) clubs has clawed its way back to 2019 levels, but the venues remain reliant on gaming revenue for their continued survival.

According to the latest 2022 charity returns, RSL clubs with an annual turnover above $0.5m generated $315m in revenue; a return to pre-Covid levels. It is an 88% increase on the low of $168m in 2020 caused by temporary closures, and restrictions on gatherings.

Overall profitability of RSL sub branches (including those without clubs) rebounded to $16.9m in 2021, from a low of $1.9m in 2020, propped up by government support of $30m across both years. Debt also fell by over $20m.

The underlying recovery is largely driven by gaming revenue and bistro and bar sales, with gaming representing up to 90% of annual income for some RSL clubs. Gaming is also highly taxed and levied. So after further deducting salaries and overheads, the RSL club could take a 25% margin on the millions lost to gambling by its customers.

Trading results are mixed: 15% of sub branches were trading at a loss in 2021. Rising operating costs and greater regulation of gambling and alcohol service are adding to RSL clubs’ problems.

RSL clubs have long been pillars of support for veterans, their families, and their local communities, but face a demographic time bomb. Younger veterans and their families can enjoy more diverse leisure and social options – online entertainment, sports, and restaurants – and are less likely to join and participate in traditional RSL activities.

Public pressure is growing to remove ‘pokie’ machines on the basis that they destroy families and launder crime proceeds. Tasmania’s RSL clubs removed their gaming machines in 2023, but other moves to introduce responsible gaming measures, such as cashless cards, have been bitterly resisted by the RSL lobby.

To remain financially viable, clubs need to diversify their offerings and provide activities and events that cater to a broader range of interests and age groups. Many sub-branches are asset rich with property and cash held in Patriotic Funds, however the funds are tied to veteran welfare.

Smart clubs are embracing digital communications to better engage the community while introducing wellness programs, fitness classes, and workshops to attract a more diverse group of patrons. Some RSL clubs (Williamstown, Surfers Paradise) sold prime real estate to pay down debt, or to fund club redevelopment (Bondi Junction, Parramatta).

Controversies involving financial mismanagement and poor governance over the years have blighted the RSL brand. It is essential, therefore, that moves by RSL governing bodies to address those deficiencies accelerate, and the unsustainable addition to gaming revenue is cured.

The anti-pokie sentiment within the community is building to a point where, any sensible RSL club must be developing long-term strategic plans, and financing strategies which reduce their reliance on pokies as a percentage of both turnover and profit.