Kalgoorlie's red light district has only one brothel left after the WA mining town's second-last establishment closed its doors.

The historic Red House is being turned into accommodation for mining workers, leaving Questa Casa - which has been operating for at least 115 years - as Hay Street's last "house of ill repute".

Questa Casa's madam Carmel, who has just matched her predecessor's 27-year tenure, said the strip was tightly-controlled and "marvellous" in its heyday.

"This was the mecca, this was where the big money was made," she told AAP on Tuesday.

"A girl could work four months, leave and buy a house.

"No-one need ever know what she'd done to earn it ... that was the wonder of this place."

Under the state government's unofficial containment policy, which ended in 2000, police turned a blind eye to brothels provided they were restricted to certain areas.

But some police - in Perth at least - still threatened to raid premises if they weren't paid kickbacks.

While the recent inquest into the 1975 murder of Perth brothel madam Shirley Finn shone a light on that corruption, it was different in Kalgoorlie.

There were rules including working girls contacting detectives before they could start, initial blood and swab tests followed by documented monthly health checks, and living on the premises, Carmel said.

Men were not allowed to be involved in the business, to the point where a madam could not have a husband.

The girls, who all came from out of town, were not allowed boyfriends or children and once you left the work, you left the town.

Carmel insisted there were no standover men and she was never approached by police or the council for backhanders.

Detectives in charge of the industry were rotated after three years, so none were around long enough to get a corrupt foothold.

"This was the cleanest run strip ... containment should have been run through the whole country," she said.

"It served the town well for a long time. Everybody had been happy with the old system."

After the containment policy ended, prostitution in suburban areas exploded.

Proposed legislation to change that in 2011 did not pass.

And in recent years, the internet has helped prostitutes strike out on their own, so there has been an explosion in small brothels and sole operators advertising risky "bareback" encounters - meaning sex with no condoms.

The increased competition also meant lower profits.

"Now it's little more than a normal wage," Carmel said.

Kalgoorlie mayor John Bowler agreed the containment policy was better and gave the town's red light district - two blocks from the police station and on the same street - "absolute protection".

"The Hay Street we all knew ... the locals had some affections for it and it worked very well for a long time," Mr Bowler said.