St George Illawarra chief executive Peter Doust has admitted the Dragons' NRL future on the south coast was under threat due the dire financial straits of the club's southern arm.

The Dragons on Thursday announced an extension of their deal to play half their games at WIN Stadium, but Wollongong fans have had the quota cut back from seven games to just six next season to bring it in line with the amount of matches played in Sydney.

But the deal will be for 2006 only, with the future of top flight rugby league in the Illawarra dependant on an improvement in the financial standing of the Steelers club and in the facilities at WIN Stadium in Wollongong.

The Steelers club, which entered into a joint venture with the St George Leagues club when St George Illawarra was launched in 1999, has debts in excess of $8 million, which will only be exacerbated by the NSW state government's poker machine tax.

While hopeful that the red and whites would continue to play out of Wollongong for many years to come, Doust said there was a chance the Dragons could be lost to the region.

"Well certainly that's a threat, there's no doubt of that," Doust said.

"I wouldn't say its a worse case scenario, it's just a threat to our business that the poker machine tax and the development of facilities down here have become (too much of) a reality for us not to do something.

"We did bring the home semi down here (last weekend) to demonstrate our commitment to the region."

Former Illawarra Steelers chief executive Bob Millward, who is a director with both the Dragons and the Steelers, said the southern arm of the club had to do more to pull its weight.

"The Steelers club has been struggling, the poker machine tax is not going to help it," Millward said.

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