The pool hall and hookah bar sits in an industrial area next to a Ravenhall hire car company and mechanic, and across the road from a funeral home.
Police have cordoned off the area about 300m from the exterior of the pool hall.
In an unrelated shooting on Rebecca Drive in Ravenhall, just one street over, in December, a Melbourne grandfather allegedly shot a man in the arm following a long-running dispute over rubbish dumping.
Police said they have yet to arrest anyone and their investigation into the incident is ongoing.
More to come