For four days last year Vegas at Waverley Gardens, a licensed venue owned by Hawthorn, operated pokies despite its gambling licence having expired, Melbourne Magistrates Court heard on Thursday.

Punters who gambled at the venue over those four days lost $66,838, the court heard.

Representatives for Hawthorn appeared before the court on Thursday to acknowledge the wrong-doing, after which Magistrate Franz Holzer put the club on the court's diversion program, which spares the Hawks a criminal record.

The program allows first-time offenders to avoid criminal records for lower-scale offences, provided they accept responsibility, rather than plead guilty.

Hawthorn self-reported to the Victorian Commission for Gambling and Liquor Regulation that its gambling licence had expired for the Vegas hotel, the court heard.

The hotel's gambling area was closed for some time, it was reported at the time.

Prosecutor Rob O'Neill, for the commission, on Thursday asked the court that Hawthorn be made to advertise its wrongdoing so the affected punters could try to recoup the money they lost.

But Elizabeth Ruddle, for Hawthorn, said such an order would pose practical difficulties as there was no way of proving how much each punter lost.

Mr Holzer said he wanted to avoid a potential "cash grab" from unlucky punters.

He ruled it was more appropriate to order Hawthorn pay a greater sum to charity than the $10,000 that was initially proposed as a donation.

That figure, Mr Holzer said, was disproportionate from the amount unlawfully gained.

Ms Ruddle said Hawthorn was content to donate the $66,838 to charities involved with responsible gambling programs.

Fairfax Media last year reported that in 2015 Hawthorn made $22.6 million from its Vegas club and the WestWaters Hotel in Caroline Springs.

Hawthorn is the most profitable of the Victorian AFL clubs when it comes to gambling revenue.

The club released a statement saying the licensing issue was the "result of an internal administration error".

"As soon as the club became aware of the error, the venue was closed and did not reopen until the licensing issue was resolved the following day.

"The club has fully cooperated with the Victorian Commission for Gambling and Liquor Regulation and will forfeit all gaming profits earned during the period in question.

"The forfeited profits will be donated to the Salvation Army."