Club bosses warned yesterday that charities, junior sport and club communities who rely on leagues club financial support will also suffer if the state government doesn't make cuts to the tax imposed on club poker machine revenue.

St George Leagues Club's Danny Robinson, one of the longest-serving club general managers, yesterday re-iterated warnings given by NRL chief executive David Gallop that Sydney clubs in the NRL faced extinction under the weight of taxes, combined with revenue losses due to the worsening economy and the effect of the smoking bans.

Robinson's board of directors last year cut leagues club funding to St George Illawarra Dragons by $2 million ($4.5m to $2.5m). With poker machine revenue down 13 per cent, he could not guarantee further funding cuts might be made in a few months time when the board reviews finances.

"This is as tough as I've seen things since 1983, when breath testing began, the country was going through a recession and we lost 6,000 members,'' said Robinson, who began 35 years ago.

"For instance last month [April] our operating profit before poker machine taxes was $1.2 million. After [the tax] we were left with just $100,000, and we had to pay community support and football costs.

"It has got to the stage where I don't think I am working for club members any more ... rather, for the government.''

Robinson said Sydney football clubs would not be able to compete against their interstate rivals and wouldn't be able to spend up to the NRL salary cap limit.

"You can see what will happen soon ... clubs will field teams that can't compete against the interstate clubs not burdened by machine taxes and end up folding,'' he warned.

"Ultimately the Dragons won't survive if finances don't improve, but they won't be the first to go because our leagues club has no debt and we can fund capital works, while other clubs have huge borrowings of more than $20 million.

"We are reviewing our underperforming assets, we're building a new car park and sub station generator and looking at including a chinese restaurant ... but our problems are yesterday's and the solution is in the future.''

Cronulla Sharks chairman Barry Pierce made it clear the Sharks' hopes for the future lie with their planned redevelopment of their 2.5 hectares surrounding their privately-owned ground, Toyota Stadium.

"We simply have to utilise our land the best way we can,'' said Pierce, who reported a 15 per cent drop in gaming and bar trade.

The club has debt but less borrowings (about $8m) compared to other clubs. "But that is in the future and we're all faced with tough times, especially when you are supporting the junior league to the tune of $300,000 a year and other club communities.''

Should leagues clubs sponsoring NRL teams be given pokie tax exemptions?