The call was confirmed by Newcastle RL chief executive officer Matt Harris on Wednesday with long-term viability one of the key concerns for stakeholders.

"It was a decision of the [Newcastle RL] board that our competitions could not proceed if social gathering restrictions remain in place," Harris told the Newcastle Herald. "All clubs supported this decision."

It means any Newcastle RL games going ahead later this year will hinge on government restrictions in relation to mass gatherings amid the pandemic.

However, even if crowd limits were lifted to as high as 500, Harris said that would be "insufficient" for the season to start on the July 18 date put forward by NSW Rugby League last week.

If non-essential mass gatherings were given the green light between now and then, and an abbreviated 10-round campaign was to get off the ground, Harris said there would be a substantial cut to the salary cap.

Newcastle RL are set to review public health orders throughout next month and deliver a final verdict by early June at the latest.

"There are basically two scenarios left now," Harris said. "Either there's no [Newcastle RL] competitions at all or there's a shortened season from mid-July."

Harris said taking this stance wasn't simply about protecting player payments.

"It was about the financial viability of the district clubs for this year, 2021 and beyond," he said.

"Without crowds there's too much risk there to push ahead just to get a game in and we don't want to put any clubs at risk."

Harris said sponsorships had already been impacted "significantly" because of the COVID-19 outbreak and clubs "still needed to generate revenue on game day".

In terms of individual financial incentives, during the week Cessnock halfback Connor Kirkwood told the "I'd be happy to play for free" while Macquarie coach Steve Kidd said "players can't be expected to play for nothing".

Maitland Pickers coach Matt Lantry fully understands the Newcastle Rugby League decison because "crowds are such a key part to any club's income stream".

He said crowd numbers as low as 100 had unofficially been bandied about as acceptable size to get games going, although nothing has been decided.

"Then there's the grey areas ... does whatever crowd number you come up with include players, coaches and trainers across three grades? If that's the case there's a chunk for your crowd total already."

Lantry can see problems policing crowd numbers too.

"It's all right at Maitland Sports Ground where you have one entry point, but how do you police crowds at say, Maitland Park for the netball where people can wander in from multiple entry points?

"Some league grounds are the same way.

"And at the same time if police turn up and you've exceeded the allowed number of people you could be up for a fine of up to $11,000. Not a lot of sporting bodies can afford that."

He is still hoping a competition will go ahead, even if matches have to be livestreamed.