And the reality is that more of these traditional Australian meeting places may close in the next few years.

"Doing nothing is not an option," ClubsNSW chief executive Anthony Ball said, encouraging clubs to diversify or perish.

The introduction of smoking bans in NSW venues in 1997, gaming tax, an increasing choice of entertainment and recreation options, the global financial crises, general economic strains and demographic changes in the region have taken their toll.

Club stalwart looks on bright side

Mr Ball said the smoking bans and gaming tax were "a double blow" that sparked the beginning of the end for many clubs, particularly for smaller ones that didn't have the financial capacity to make changes, such as adding outdoor gaming areas.

"The clubs did respond to the policy shocks and it depended on their financial capacity on how they could respond,"' he said.

In recent months the Mercury has reported closure of Port Kembla RSL Club, a bid by Jamberoo Bowls Club to sell off land to secure its future, and Wests Illawarra Leagues Club's offer to amalgamate with struggling Corrimal Leagues Club.

But it's not all gloom, with many of the 73 remaining clubs in the region pushing forward by diversifying, operating smarter and responding to what communities want.

Mr Ball echoes club operators in saying the only way clubs can survive and thrive is by embracing change and maintaining community focus.

"The clubs that are steaming ahead are those that are thoroughly modern, in touch with their members and are diversifying to a greater extent," Mr Ball said.

Warilla Bowls and Recreation Club and Oak Flats Bowling and Recreation Club, which amalgamated with Illawarra Yacht Club earlier this year, provide two very different examples of diversification in the industry.

This December, the Warilla club will open the doors to its $6.3 million revamp, which is the result of 18 months of strategic planning.

The changes steer away from the reliance on gaming revenue and focus on developing a resort destination aimed at the young family market.

The Oak Flats club is moving forward by going back to the simple things, with its sustainability initiatives leading to significant financial savings.

It is Australia's first carbon-neutral club, cutting its water usage by 45 per cent, reducing the amount of waste going to landfill by more than half and reducing energy use.

It has ditched VB bottles and now only offers the ale on tap; a synthetic bowling green has reduced the club's water and maintenance costs; rainwater is harvested for use in toilets and energy-efficient lights have been installed.

There is a vegetable patch, worm farm and a 36-chicken poultry run to recycle food waste.

"When we first started diverting our food scraps from garbage bins, we saved $11,000 in pick-up fees in the first year and then $15,000 in the year after that," chief executive Matt O'Hara said.

"In terms of the work we've been doing in sustainability we're tapping into the community and what the community values are.

"Our members tell us that they have a strong expectation that we do the right thing."

Mr O'Hara said there was a strong emphasis on food services, with the club having grown from a "pokey 70-seat restaurant" to operating 260 seats.

"People want good value and good value doesn't mean cheap," he said.

"They want to come in and sit on a nice chair and have a nice meal."

Warilla Bowls and Recreation Club has also recognised that good food and modern facilities are a must-have.

"With all the food shows on TV there's an increase in expectations from patrons," said Warilla Bowls and Recreation Club general manager Phillip Kipp.

The club's improvements include a new main lounge area, platinum-plus TAB lounge, modern Australian brasserie, café and pizzeria and renovations on existing cabins to raise their accommodation rating from three-star to four-star.

There are future plans going into 2016 to double the club's accommodation capacity from 20 cabins to 43 and to convert a bowls green into an alfresco dining area.

Mr Kipp said the club supported about 50 organisations, from preschools to junior sports teams, to the tune of about $250,000 a year.

"What has made it hard has been the legislation changes in the past 10 years," Mr Kipp said, referring to the smoking bans and gaming tax that have affected clubs' revenue.

"If we lose a club we lose a social amenity, and that's especially important for elderly people."

Clubs have historically been a second living room for Australians - a place to socialise, eat and drink.

The majority are bowls clubs, followed by RSLs and sport and recreation, such as league and football.

"We see people through their whole life cycle," Mr Kipp said, adding that get-togethers at clubs ranged from the first date to 21st birthdays, baby showers, weddings and wakes.

The Illawarra and Shoalhaven's 73 clubs make an annual social contribution of $51.7 million, have 319,357 memberships, provide 228 sporting facilities and employ more than 2750 people.

Mr Ball said the clubs helped jointly fund the inaugural chair of Paediatrics and Child Health Research at the University of Wollongong earlier this year through charitable giving.

In addition to a sense of belonging for members through socialisation, registered clubs are not-for-profit organisations that provide tangible benefits to the community through subsidised infrastructure and facilities, cash and in-kind support to charities and volunteering.

Club members gain access to affordable facilities, meals and services in exchange for membership fees.

"The club is the modern-day town square where people can come together," Mr Ball said.

"Clubs are much more than bricks and mortar, poker machines and a bar.

"They're part of the social fabric of the Illawarra and that needs to be protected and maintained."

Mr O'Hara said Illawarra's economy was reflected in the clubs, adding that he had noticed a drop in the number of tradies hanging around for a drink in the past six months.

"The banks have got their hands around the throats of middle-class Australia more than ever before," he said.

With its financial stability, the medium-sized Oak Flats club had no hesitation in amalgamating with struggling Illawarra Yacht Club earlier this year.

Mr Ball said he had heard of some clubs resisting amalgamations, but suggested that mergers were necessary as demographics changed and costs escalated.

"It was a rationalisation that was always going to happen," Mr Ball said. "There was a boom time in the 1950s and 60s as poker machines were legalised but over the last 10 years we've seen a rapid consolidation with club closures and amalgamations.

"Clubs aren't just competing against a couple of pubs [for the spending dollar] … they're competing against hardware stores and the internet.

"It's not enough to have a bank of poker machines and a bistro."

What is happening in the Illawarra is a trend throughout NSW. In July 2011, there were 1471 registered clubs in NSW, down 4.2 per cent from 1535 in 2001.

Overall, 64 per cent of the industry is at risk of financial distress, the NSW Club Census 2011 reports, based on the Independent Pricing and Regulatory Tribunal's (IPART) estimation.

The census said that in 2011, 61.7 per cent of the industry's revenues came from gaming machines - a source of revenue clubs are starting to become less reliant on as they switch the focus to catering and food offerings.

IPART also found that there was a correlation between a club's ongoing level of investment and its long-term financial viability. Small clubs are identified as those most likely to struggle.

But Mr Ball is optimistic that many clubs are taking the right approach to make sure they survive.

Other examples of innovative revenue boosters include Wests Illawarra Leagues Club taking over the internal catering operations of its café next month and employing a full-time social media co-ordinator to keep in touch with members; Wollongong Golf Club introducing night golf and City Diggers renewing its focus on live entertainment.

"I sense there is some optimism in our industry and we need to accept rationalisation is something that's needed," Mr Ball said.

Interestingly, the 2011 census reported that less than 13 per cent of respondents listed amalgamation or closure of club operations as being a response if revenues decreased by 10-20 per cent.

"I think there's still amalgamations and closures to happen, unfortunately, but I suspect we're not too far away from being settled," Mr Ball said.

Mr O'Hara said he too remained optimistic about the future.

"With any hiccup in business you need to be ready to weather the storm," he said.

"I think, for us, we've made the changes that I think have positioned ourselves well for the next 10 years."

Illawarra and Shoalhaven clubs that have closed or amalgamated since 2002: 

• Illawarra Yacht Club amalgamated 2012 

• (Collegians) Orb Bowling & Rec Club amalgamated 2012 

• Sussex Inlet Sports & Rec Club closed 2012

• Kangaroo Valley Bowling & Rec Club closed 2012 

• Helensburgh Workmen Bowling Club closed 2010 

• Wollongong Spanish Club closed 2008

• Austinmer Bowling Club closed 2007 

• Grange Golf Club amalgamated 2005 

• Shellharbour Golf Club closed 2004

• Berry Sports & Social Club amalgamated 2003

• Helensburgh Bowling & Rec Club amalgamated 2003 

• Berkeley Sports Club amalgamated 2003 

• Shellharbour Bowls & Rec Club amalgamated 2002 

• Port Kembla Bowling Club closed 2002

Changing to survive

Strategic plans successful Illawarra and Shoalhaven clubs have adopted to save money and raise revenue, with less reliance on gaming revenue, include the following: 

• Cutting costs through sustainability. 

• More emphasis on food services and in some cases reclaiming internal catering operations. 

• Modernising facilities, catering to young families. 

• Improving accommodation facilities. 

• Communicating with members and increasing use of social media. 

• Innovative ideas such as night golf. 

• Offering more live entertainment.