Clubs may fold

As many as seven National Rugby League clubs may fold under proposed NSW Government poker machine taxation changes, an independant report has concluded.

The report, carried out by Ferrier Hodgson, revealed that many Sydney-based NRL clubs who depend heavily on revenue from their leagues clubs, would struggle to survive under the new system due to be phased in from next year.

NRL Chief Executive David Gallop described the prospect of clubs beng unable to survive as an "alarming aspect" of the situation.

"Our football clubs need funding from leagues clubs ... and if that funding is removed they won't be able to survive either," Mr Gallop said