Rugby Union was a established sport in NSW/QLD, sets of rules were established and being used in NSW by the 1840s compared to AFL which was in the 1860s.

A lot of educational establishment and sporting clubs maintained a link to British heritage and would push for sports to be brought over from England.

AFL is believed to be a cross between Rugby/Soccer/Mangrook(Aboriginal AFL) and having such a big English/UK population at the time they'd choose English sports over the hybrids that were emerging.

Simply Rugby was already established in NSW/QLD as a dominant sport and was the preferable game to play!