The tycoon was filmed as he visited the retailer's Shirebrook headquarters in front of journalists, as he tried to fend off criticism about the way his workers have been treated.
When asked to empty his pockets into an airport-style security tray, he pulled out the wads of £50 notes.
Following a comment on the amount of cash he was carrying, he joked: "Yes, I've been to the casino."
Twitter users were quick to pick up on the footage after it emerged, with Mr Ashley, who also owns Newcastle United, soon trending on the social media site.
Referencing Newcastle goalkeeper Rob Elliot, betting site Paddy Power posted: "Rob Elliot's contract extension and subsequent wage increase will be paid in fifty quid notes straight from Mike Ashley's pocket."
Sport account Big Sport said: "Mike Ashley getting searched and pulling out a massive wad of £50 notes. A man of the people..."
Parody account Money Mike Ashley quipped: "Forgot I had this toilet paper in my pocket."
The footage was filmed during the firm's Annual General Meeting and 'open day'.
Shareholders delivered a blow to Mr Ashley at the AGM by rejecting the reappointment of its chairman to the board.
Sports Direct has been under the spotlight for months after a newspaper investigation exposed conditions at Shirebrook, amid claims by MPs that it was being run like a "Victorian warehouse".
Some workers were effectively being paid less than the minimum wage because they were subjected to security checks outside the times when they were clocked in for work.
Sports Direct has apologised and offered better working conditions.
After a stinging internal report, the firm promised on Tuesday it would pay staff it directly employs above the minimum wage.
The company said the workers would be offered the option of switching from zero-hours contracts to contracts with at least 12 hours of work per week.
However, the bulk of workers will miss out as they are employed by agencies.
The report showed the vast majority of the company's 27,000 directly-employed or contract staff were on casual contracts.