HASTINGS community groups will be seriously out of pocket as one of the town's clubs has been forced to cut its donations by $200,000.

Like clubs around the state, Port Macquarie Panthers is feeling the squeeze of new smoking laws, an increase in the gaming tax and rising interest rates.

Last year the club poured $400,000 into the community as well as sponsoring a number of events including the Ironman triathlon in April and the popular Queen of the North race day.

While the club's general manager, Thomas Paynter, says he would love to continue donating money, it was becoming more difficult.

"We love being able to support community groups, but there are going to be some major cutbacks this year," he said.

"We support between 40 and 50 organisations and sadly a majority of them are going to have to look elsewhere for funding this year."

Mr Paynter said the cutbacks had to be made to ensure the future of the club in the community.

In yet another tough decision for the entertainment venue it has decided to cancel its sponsorship of the Queen of the North Race.

The event, which is in its fifth year, received thousands of dollars in sponsorship from the club.

Port Macquarie Race Club publicity officer Ken Gentles said it was negotiating with a new sponsor and the race would go ahead regardless of the outcome.

"We understand that Panthers did not want to end its sponsorship deal and both parties are sad to see the end of the agreement," he said.

"But we do understand and are hoping to have a new sponsor in the near future."

The latest figures released by the NSW Office of Liquor, Gaming and Racing, between July last year, when the smoking ban was implemented, and February, show that turnover from poker machines fell by 11.4 per cent in pubs and by 7.7 per cent in clubs.

Clubs NSW has warned of serious consequences for businesses facing the reality of plummeting turnover as a result of new smoking laws, an increase in gaming tax, rising interest rates and crippling petrol prices.

On a positive note, however, Port Macquarie Panthers says visitor numbers to the club are on the rise.

"The club smells so fresh now and there are a lot more families coming through the doors," Mr Paynter said.

"However, these are tough times for the Australian economy and people don't have that discretionary dollar to spend any more."

Special report: Page 4

Editorial: Page 10