The Territory Government is providing a multi-million dollar guarantee to see a new sports bar with gaming machines built, despite its heavily touted aspirations to curb anti-social behaviour.

Key points: The NT Government guarantee will help the turf club build its new Silks Club

The NT Government guarantee will help the turf club build its new Silks Club The venue is expected to generate $2m in gambling taxes annually

The venue is expected to generate $2m in gambling taxes annually Thoroughbred Racing NT will have received almost $35m over three years in government grants by the end of June

Documents recently made public show that in July last year a $3.5m government guarantee for the Darwin Turf Club was extended to facilitate the construction of its new Silks Club.

This means if the Turf Club defaults on a loan for the new venue, the NT Government will repay all of its financial obligations.

The new Silks Club will house a sports bar, beer garden, restaurant, TAB and gaming machines and is expected to generate $2 million in gambling taxes annually.

Thoroughbred Racing NT would have received almost $35m in grants from the government over the past three years by the end of June.

Treasurer Nicole Manison, who has declared that her brother-in-law sits on the Darwin Turf Club board, approved the extension of the guarantee that was first secured in 2007.

"Yes, as Treasurer I approved the extension of the existing guarantee, limited to $3,500,000, under s34 of the Financial Management Act, following advice from the Attorney-General," Ms Manison stated.

"As Treasurer I have a declared related party disclosure in relation to a close family member that is on the Board of the Turf Club."

Asked how the obligation fits with its priority of curbing anti-social behaviour, Attorney-General Natasha Fyles pointed out that its focus was on liquor licensees who do the wrong thing.

She also said the project would benefit Territorians — as it would create ongoing jobs as well as jobs during the construction phase, and would promote the horse racing industry and therefore tourism.

Ms Manison said no payments were made by government directly to the Darwin Turf Club in the past three financial years.

However, Thoroughbred Racing NT received $10.46m in the 2016-2017 financial year, $12.65 million the next financial year and would have received $11.65 million by the end of this financial year.

Ms Fyles said it was an election promise to restore funding to the racing industry — to create jobs and stimulate tourism.

Questions about the turf club guarantee were put to Ms Manison by Opposition Leader Gary Higgins, who said he will now closely analyse the Northern Territory Government's response.

Government guarantees three other projects

Only three other projects are guaranteed by the Territory Government: the Master Builders fidelity fund, support for the Adelaide to Darwin railway project and the facilitation of specific land releases through the Land Development Corporation.

Ms Manison stated that before the guarantee was extended last year, Ms Fyles considered whether it would be of benefit to Territorians and did due diligence on the project.

"This included consideration of economic benefits, such as job creation and the promotion of horse racing, including associated benefits to tourism in the Northern Territory," she stated.

"In terms of risk, AGD advises that information was obtained from Darwin Turf Club's financier on the project, including total borrowings proportionate to the extension of the existing guarantee."

Asked if anyone without a financial stake in the turf club was consulted about the risk, Ms Fyles said legal advice was sought regarding the legal options and structure of the guarantee.

"However, the issue of whether a guarantee should be given is ultimately a matter for the Territory and no other stakeholders were consulted," she said.

In a press release in March 2017, Darwin Turf Club chairman Brett Dixon said the new venue would generate about $2 million in gambling taxes each year.

"Once in full operation, an estimated $2 million in gaming taxes with approximately $500,000 in GST revenue will be injected into the Northern Territory economy annually," Mr Dixon said.

"Furthermore, the success of this venture will financially assist NT racing in investing back into the Alice and Darwin Carnivals; these events provide a huge injection into their local economies, it is important to continue investing in the Carnivals to further grow the attraction for tourists to the Territory."

The Darwin Turf Club was contacted for comment.

In November last year, the NT News reported that work on the new Silks Club was expected to begin in December 2018 and was expected to be completed before the Darwin Cup in August this year.