Only a handful of the semi-automatic handguns have been recovered, but police say Shane James Simpson's weapons have been used by gangland killers, drug networks and other organised crime.

Detectives set up Strikeforce Myosoti in November 2018 to investigate how illegal guns were moving across the country and discovered an "anomaly" around a Port Kembla gun shop in NSW's Illawarra.

It's alleged the shop's owner was secretly removing identification markers on guns and selling them on to criminals and unauthorised clients since at least 2012.

Police believe more than 300 pistols were onsold but only a fraction have been recovered.

"We identified at least 30 firearms that had made their way into the hands of organised crime - 20 of those in crime scenes across NSW," Acting Assistant Commissioner Stuart Smith told reporters on Thursday.

"We will allege he is a profit monger in organised crime and that weapons recovered were recovered from crime scenes including gangland murders and other crimes in other states."

At least two killings in Sydney were allegedly committed with guns sourced from Simpson.

Mr Smith said the arms dealer was one of the most significant scalps for organised crime investigators because "professional facilitators" were rare and hard to uncover.

"(Simpson) might as well have had the gun in his own hand and committed the crimes that have been created from his," he said.

The man features in an online cooking series called "Hunting the Menu" in which he and co-hosts would hunt wild animals to cook in gourmet meals.

Mr Smith acknowledged police "did not see (this domestic operation) coming by a long shot" but surprised the dealer when they walked into his store on Wednesday.

He was arrested and 340 guns were seized.

"We then rolled into two further search warrants where we recovered the equipment used to deface or alter the firearms," Mr Smith said.

Simpson has been charged with 47 offences including supplying a pistol to unauthorised persons, altering gun records, failing to keep records as a weapons dealer.

He faced Wollongong Local Court on Thursday where bail was refused.

Mr Smith said the guns were likely to be linked to further crimes and more arrests were possible.

Alluding to the Christchurch mosque massacre, he said recent world events proved even legal firearms in the wrong hands could have an "awful" outcome.

He said it was the responsibility of NSW agencies to uphold "the legacy" of former prime minister John Howard's firearms laws.

Australian Associated Press