The Australian Hotels Association has frozen political donations to the NSW Labor party, ahead of a proposed ban.
The state government is considering scrapping all political donations and running election campaigns with public funds instead.
The AHA has donated close to a million dollars to state Labor in the past decade.
Greens MP Lee Rhiannon says she expects others to follow suit.
“The AHA has sent a clear message to individual hotels, developers and the other big backers of major political parties, that it’s not worth handing over this money.”