For reference, here is the AFL's policy.

Of particular relevance is pages 12 and 13, the criteria for refusal which were presumably the basis of the decision.

The key words: "strength, stamina or physique."

https://resources.afl.com.au/afl/document/2020/09/30/0c537f03-e073-4a38-a766-209717ceeee4/AM-7411-0920-AFL-Elite-Football-GDP-Policy_FA.pdf
These are the words in the Australian Sex Discrimination Act 1984 as amended, s. 42. https://www.legislation.gov.au/Details/C2014C00002

The same wording is used in s. 195 of the Equality Act 2010.

https://www.legislation.gov.uk/ukpga/2010/15/section/195
There is some very interesting Australian case law on the words and when a sport is, to use the UK term, gender-affected, with the most recent I'm aware of being Coady v Yachting Victoria, which covers and discusses most of that case law.

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCCA/2019/2095.html
However, I am unaware of direct Australian case-law on trans players. This would, then be an interesting precedent on how the statutory phrase would be applied in those circumstances (assuming, of course, that it does go to Court and a decision is given).
There is, in passing, an interesting Victorian case on AFL as a gender-affected sport from 2004. In essence, the judge felt that under-15 there wasn't a significant enough difference to be gender-affected but that over-15, there was. https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2004/158.html
Being a Victorian case it is, of course, a Victorian case about Victorian law with a paean to Aussie rules at paragraph 45 as being the most Victorian game for Victorians.

Because Victoria.
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