Parramatta's Rose and Crown Hotel came to the light of authorities thanks to a disgruntled manager who was herself convicted of stealing $15,000 from the pub.
Staff gave gamblers free booze and cigarettes, loaned cash from the pub's safe to them and allowed punters to make at least $145,000 in credit and debit withdrawals from the eftpos machine.
One manager loaned a patron $8000 from the safe to keep them gambling while a security guard gave another punter $800 from the safe.
NSW's Independent Liquor and Gaming Authority fined the pub's licensee, RC One Pty Ltd, $107,358.
It also fined the pub's manager Paul Camkin $10,000 and barred him from being a licensee or managing a hotel for a year.
Two of his close associates were reprimanded and the three men were ordered to pay the costs of the regulator's investigation.
Liquor and Gaming published its decision along with a statement of reasons on Friday
The regulator's chair, Phil Crawford, thanked the pub's general manager, Samantha Glynn, for tipping off authorities.
But Ms Glynn was charged by NSW Police for stealing $15,000 and put under an 18-month intensive corrections order.
The regulator said Ms Glynn was manipulating the poker machines' payout systems, allegedly allowing her to steal up to $400,000.
When she was caught by the Rose and Crown's management she was suspended. Ms Glynn then reported the hotel to the gaming authority.
"Thanks to the tip off from the general manager, we were able to step in and investigate the hotel, ultimately holding the licensee and its close associates to account," Mr Crawford said.
"The hotel was essentially facilitating cash advances for gambling via a system of fake transactions and this is an obvious risk for problem gambling."
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