The group believed their stunt was a success, with mixed reports it was affecting coverage or photos of the event.
Rolling television coverage did not seem impacted by the flashing torches but some imagery appeared to have been blurred as a result, such as those Racing NSW live tweeted.
People can also be heard chanting against Alan Jones, the shock jock who started the furore late last week.
The government overturned a decision by Opera House management which had earlier rejected the plan saying it breached its guidelines.
Betting on the lucrative Everest Cup has now been suspended as the row rages on. The barrier draw was conducted early due to concerns that security issues at the Opera House tonight could have prevented it going ahead as planned.
The result is being kept secret until this evening when the controversial imagery will be projected on to the sails.
The measures came amid threats and guerrilla protest plans that forced police to upgrade security around the event.
The decision came after Jones, 2GB radio host, conducted a fiery interview on Friday with Opera House chief executive Louise Herron in which he called for her to be sacked for opposing the plan.
This morning Jones apologised for publicly berating Herron.
Tony Mohr, executive director of Alliance for Gambling Reform, said they would not be bullied by the likes of Alan Jones.
"We have an icon of australia that has been corporatised and sold off to an industry that will bully anyone who gets in their way," he said.
"People like Alan Jones think they can bully us.
"Today is the second day of the NSW government's gambling awareness week - this shows it is just a meaningless PR stunt."
Irate Sydneysider Ellen Estelle said she remebered her parents taking her to the opening of the Opera House and she could not believe what was happening to it.
"We are seeing everything we own sold off for a quick buck from the post offices to Barangaroo and now this.
"We are here to tell Gladys Berejiklian to back off."
A petition opposing the plan has garnered more than 230,000 signatures.
Protest organiser Rachel Evans says there's "a lot of anger on the streets" about the plan which she's described as an "assault on the Opera House".
There are even fears a disgruntled staff could cut the power to the Opera House during the display.
Everest organiser Racing NSW claims staff had even received death threats.