The Imperial Hotel has been slapped with a second 72 hour closure order one month after a police raid shut down the venue for its lax control of illicit drug use and anti-social behaviour.

Newtown police have confirmed on Friday night that the iconic LGBTQI (Lesbian, Gay, Bisexual, Transgender, Questioning and Intersex) venue in Erskineville has been banned from operating over the weekend.

Fairfax Media understands the Office of Liquor, Gaming and Racing will front a press conference addressing the closure on Saturday.

A post on the venue's Facebook page posted at about 6.30pm on Friday evening read: "Unfortunately Imperial Hotel Ersknvl has been requested by the authorities to close for 72hrs, therefore we can not operate this weekend."

A NSW Police spokesman said on Saturday that that the closure order was served due to "breaches of the Liquor Act".

The closure comes the same day that the hotel's new owners, Spice Group International (SGI), announced that they have pulled the plug on its well-known nightclub, The Spice Cellar.

SGI blamed the NSW lock out laws for the "difficult and heartbreaking decision" to close the weekly techno haunt in the Imperial's basement, they said in a statement on Friday afternoon.

The closure comes just three months after the nightclub dodged the 1.30am lockouts and 3am last drinks laws by moving from its Martin Place venue within Sydney's entertainment district to the Imperial Hotel in the inner west.

But the laws and "conservative groups" had done their damage, putting Sydney's late night entertainment industry "under duress", according to the Imperial Hotel's new owners.

SGI, founded by Murat Kilic, blamed the lock-out laws for forcing the clash between its nightclub revellers Erskineville locals and the police.

"They should not feel at war with each other but be on the same side with peace, unity and respect," the statement read.

In June a police raid at the Imperial Hotel forced the venue to close its doors for 72 hours after bar staff were allegedly caught using illicit drugs and intoxicated revellers were spilling out onto the street, causing disturbances.

"The hotel has come under increasing attention by both Office of Liquor, Gaming and Racing and Police due to numerous drug detections, repeated intoxication issues, and ongoing disturbance issues from patrons leaving the venue in the mere two months since the hotel came under new management," according to a statement from OLGR.

The venue's operators had been repeatedly served official warnings by authorities concerning its lax drug control measures, the OLGR said.

At the time the Australian Hotels Association hinted Sydney's lock out laws are to blame for nightclub operators creeping into residential communities to avoid the stringent regulations inside the entertainment precinct.

"Lock-out laws are not the way forward; restricting people's civil liberties and disadvantaging industry causes a negative carry on effect to culture, jobs, tourism, entertainment to name a few," the SGI team said in their statement on Friday.

"We have become a society where people are becoming less and less responsible for their own actions. Who is really at fault for bad behaviour? Is it the venue that serves the alcohol, the promoter who organises the event, the alcohol companies who produce the alcohol OR is it the individual?" it read.

The Spice Cellar management had made attempts to address some of the anti-social behaviour of some of its patrons.

After the 72 hour shutdown a sign on the venue's front door warned patrons not to be 'assholes'.

"If you are here," it read, "You respect this neighbourhood and our family. You are not a transphobe; you are not a homophobe; you are not a misogynist; you are not an asshole," the sign read.

Mr Kilic could not be reached for comment.