Bing Gentlemen’s Club in West Bromwich town centre will be forced to cease all lap dancing activity unless its bosses successfully appeal the decision.
The club also had its premises licence suspended to allow bosses time to make changes such as installing improved CCTV and lighting.
It means the club could continue to operate as a bar serving alcohol without any sexual entertainment.
A licence review hearing on Monday heard West Midlands Police had wide-ranging concerns about how Bing was being run which came to light following the disorder.
These included a potential for prostitution taking place inside the premises, a potential for dancers to be aged under 18 and a lack of consideration given to the possibility of its dancers having been trafficked.
Police licensing officer Mick Boyd, said: "It is not thought staff at the club could determine if the Romanian women [working at the club] were under age to work as lap dancers.
"No steps were taken by staff to prevent child sexual exploitation.
"There was no evidence of rules for the dancers or customers. There was no price list displayed in any area of the club. The potential for prostitution is great.
"The club was run for complete disregard for licensing rules and any consideration of possible exploitation or trafficking of the dancers who worked there."
Police sought to have the club's sexual entertainment licence revoked following the "large scale disorder" in the early hours of March 5.
A 27-year-old man was found with serious head injuries outside Bing which is located on the corner of High Street and Victoria Street.
Monday's hearing heard the man has "life-changing" injuries and is now partly paralysed down his left side.
Mr Boyd, added: "We don't know how long his recovery will take, if he recovers at all."
A police investigation into the incident is on-going.
Licence holder, Shanvir Singh, and lease owner, Henry Nandra, were present at the hearing in Oldbury and represented by solicitor Avi Pawar.
Mr Pawar argued it would have been a "draconian" step had the premises licence been revoked given there been only one "serious incident."
He also set out a number of measures which had since been implemented by his clients including improved staff records, new signs setting out the cost and duration of dances, and a new camera system.
He said none of the dancers working on the night of the brawl had been under 18.
He added: "Both men would like to apologise for the way in which the business has been run previously. They accept mistakes have been made.
"There have been issues in relation to their own relationship which led to the mistakes taking place."
The club, spread over three floors, was closed voluntarily by the pair for a period following the brawl, but has since reopened.
Mr Pawar said his clients are seeking to sell the business to the current designated premises supervisor, Tarlaz Dosanjh.
Mr Singh and Mr Nandra declined to comment after the review hearing.