Children among seven injured as burnout goes wrong

The man's car smashed into a parked vehicle which then struck seven onlookers including two children, police confirmed.

"It is very, very concerning that we've got eight and 10-year-olds out at a street racing event at that time of night, and certainly that will be part of our investigation," NSW Police Assistant Commissioner David Waddell told reporters on Sunday.

"We will no doubt be canvassing exactly why those children were there and look at submitting child-at-risks in relation to those children."

The children were treated by paramedics at the scene and rushed to hospital with serious injuries.

Five other adults attending the illegal street racing event were also injured and taken to hospital for further treatment.

The driver remains in hospital under police guard with serious injuries.

Police have established a crime scene as they probe the circumstances of the crash.