There are ways to do this premise realistically, like 1984 where sex is only used in reproduction and so heavily outlawed and regulated that only specific instances are allowed related to the leading party.
This is not one of those cases.
For starters, how the hell did THAT law get passed? ESPECIALY in a representative democracy where the most famous politicians are probably corrupt as all hell and doing hookers and blow every night? The circumstances they presented for why sex got outlawed makes no sense at all.
Also, a club like this would definitely raise some attention there's what, hundreds of people here? How would this stay a secret for this long, especially with high-profile individuals scouting the premise?
Also, did we really need a gratuitous shot of the black dude with an erection? And why did he instantly jump to violence as the solution instead of just laughing the dipshit off?