The boss of a Midtown jiggle joint admitted yesterday he knew some of his strippers were selling sex in the VIP rooms — and he encouraged it.

In a sweet no-jail deal, former Hot Lap Dance Club impresario Louis “Big Daddy Lou” Posner pleaded guilty to promoting prostitution — closing the case on the red-velvet-swathed West 38th Street nooky palace that once grossed him $22,000 a night.

“I was aware that a number of the dancers were regularly engaged in prostitution . . .” Posner told a Manhattan judge of the club, which was raided in a scurrying tumult of armed cops, naked women and half-naked men in July 2008.

Under the deal, Posner will serve five years’ probation. He could have faced up to 15 years on the original money-laundering charges.

There’s a big sour spot, though. Posner can never run a strip joint again — or even set foot in one.

Posner confessed to “personally engaging in sexual conduct with dancers . . . in exchange for allowing them to work at the club.”