Entertainment licences are meant to be for nightclubs and other venues that lay on genuine events, such as discos and live bands, Lothian and Borders Police say.
However, they claim pubs are getting nightclub licences allowing them to stay open until 3am, when they are doing little more than serving alcohol.
Inspector Norrie McLean of Lothian and Borders Police said pubs that open late but do not lay on genuine entertainment will face police action.
He said: "If I find that the holder of an entertainment licence appears not to be operating as intended, and advice is not heeded, it would be my intention to lodge an observation to that effect with the local licensing board."
Licensing Board convener Councillor Dougie Kerr said: "Venues that get an entertainment licence should be laying on genuine entertainment, not just selling alcohol with music in the background."
One nightclub promoter said: "It's about time these pubs were sorted out. They are simply flouting the regulations for their own profit.