South Sydney have lost their battle to avoid sanctions for the club's handling of the Arizona pre-season scandal, with the NRL's $20,000 fine to stand.

The Rabbitohs responded to the governing body's breach notice and argued the penalty was too harsh given the integrity unit's admissions that it too could have handled the situation better. Fairfax Media revealed that then-captain John Sutton and former Rabbitoh Luke Burgess were involved in a boozy night out, with the latter charged over the incident. The charges were dropped after Burgess paid a security officer compensation.

The NRL's chief operating officer, Suzanne Young, said "the club had failed to follow the matter to its conclusion", but the premiers put in a submission arguing they presented the facts as they became apparent.

"Our response is based on two things," Souths boss John Lee told The Australian last month. "One, we don't see the NRL has set out the merits of their case. We purposely informed the integrity unit the day it happened.

"We kept them up to date with what we knew. So we don't agree with the merit that they claim we didn't keep them informed. We strongly and categorically believe we did.

"To then fine us where the NRL have even publicly acknowledged they did not complete their own task to the level they would want in the future, it seems a bit of an irony that we be issued with the severity of a $20,000 fine when they have made mistakes themselves, as they stated."

However, after taking several weeks to consider the Rabbitohs' response, the NRL determined the $20,000 fine would stand.