Sydney resident Brad Clegg said when he attempted to take a photograph of the 42-year-old golfer at the Royal Sydney Golf Club, Daly lost his temper and smashed the camera into the ground and then threw it into a tree, The Times of London reported.
Clegg said Daly did offer to purchase a new camera for him following the outburst.
Daly confirmed the incident on the green did occur but added in a statement that it was prompted by Clegg's "rude" use of his camera.
"I was looking to take a drop and the camera was 6 inches away from my face," Daly said.
"If I was 10-under-par I would have felt the same. My eyes are still burning from the flash of the camera. I feel it was very rude to put a camera that close to anybody's face in any situation."
The two-time major winner, who is struggling at the Australian Open, won't be sanctioned by tournament officials for the incident, The Times said.