I think the club is right actually, in legal terms. Not everywhere HAS to.
That said, that's really really irresponsible in my opinion. So they'd rather have people potentially ill rather than give a small cup of water? Do you have to be off your face and passing out before you get water?
I noticed McDonalds now have special tiny 'courtesy cups', about half the size of a kids' meal cup, for the free water. Stingy, heh.