He was told by two connections of the Gai Waterhouse stable not to back the horse.
Hayson was warned off because he refused to reveal the names of his sources saying he was concerned for their future employment.
The horse's owner, John Singleton, was also told by his vet not to back the horse.
Punters lost more than A$10 million on the race, unaware the horse had been under treatment all week.
Trainer Gai Waterhouse was fined a paltry A$5000 for keeping stewards in the dark.
Hayson appeared before a Racing NSW panel last week with his legal representatives Dr Sarah Pritchard SC and William O'Brien.
Veteran commentator Ken Callander had earlier said a warning-off would be unfair.
"Racing NSW and the stewards are entitled to pull Hayson into line over the matter and strongly point out to him the error of his ways," he said. "But warning off is way over the top.
"Every big stable in Sydney and Melbourne has employees who tip to outsiders. To think this is not the case is extremely naive."
Hayson said he would appeal against the decision. Racing NSW said yesterday the decision to warn off Hayson was made after last Thursday's show-cause hearing.
"Racing NSW is on record time and again as saying integrity in this industry is paramount," V'landys said. "Accordingly, no individual's interest should outweigh the confidence of the public, and particularly punters, in the integrity of the industry.
"This was a very important matter. A particular line of inquiry that stewards wished to pursue couldn't proceed, because of the actions of Mr Hayson.
"By refusing to co-operate, he left Racing NSW with little option but to issue a determination; one that is intended to protect the industry by acting as a deterrent to Mr Hayson and others about similar conduct."
