The Parramatta Leagues Club board has been sacked and an administrator appointed after officials were accused of using inflated invoices to make under-the-table payments to players.
The Parramatta Leagues Club, which provides entertainment and leisure services to members, owns the Parramatta Eels NRL club.
But the decision to remove the Leagues Club board effectively removes the Eels board as well, as the two boards shared the same seven directors. Directors must sit on the leagues club board to be on the other.
A spokesman for the Independent Liquor and Gaming Authority said it resolved to replace the board with a temporary administrator, Max Donnelly, of Ferrier Hodgson.
He said the authority was of the opinion the club's board had ceased to be effective as a governing body.
A statement from the authority said it "wishes to make clear that the appointment of a temporary administrator does not relate to any suggestion of insolvency".
Mr Donnelly is expected to remain in place until the authority decides otherwise.
Eels officials were accused of using merchandise sales and inflated invoices to make payments to team members.
Earlier this week the leagues club's chairman, Steve Sharp, wrote to the New South Wales Government asking it to appoint a temporary administrator.
In a letter addressed to Deputy Premier Troy Grant, Mr Sharp said the club had "deep-seated political issues" and conceded leaking, gossip and speculation had made it "impossible for the governing body to be effective".
The move came in the wake of five Parramatta Eels officials being deregistered and the NRL team being docked competition points for salary cap breaches.