NSW Opposition Leader Luke Foley has defended his plans to slash wagering taxes, saying pokies are a bigger problem than race betting.
Mr Foley wants to cut the tax applied to every $100 wagered on racing from $3.22 to $1.28, bringing NSW into line with Victoria.
The plan is designed to create jobs and help the state's racing industry compete.
But anti-gambling campaigner the Rev Tim Costello says a tax cut could worsen "out of control" problem gambling.
"One way of at least bringing back some benefits from this complete loss of control is taxation," he told AAP.
"It places a cap on gambling, discourages it and returns some benefits to the community."
Mr Foley downplayed the significance of track betting to problem gambling.
"I don't disregard the issue of problem gambling," he said.
"But I know the racing industry has invested in many programs that address problem gambling."
NSW now taxes gross returns on totaliser betting at 19.11 per cent, the highest rate in the country.
The change would bring the state into line with Victoria, which collects 7.6 per cent, or $1.28 for every $100 wagered.
Mr Foley estimated the move would create 2000 extra racing jobs, saying costings would be released before the March 28 election.
Racing NSW chief Peter V'landys welcomed the proposal, calling the current system outdated.
While the Victorian industry collects $7.90 for every $100 wagered, he said, the NSW industry gets just $4.70.
That's a difference of $100 million per year despite Victoria holding fewer race meetings.
"The people that are keeping this industry going are leaving in droves - and that is owners of racehorses," he said.
The tax cut was reportedly first recommended in a confidential September report by former NSW Treasury chief Michael Lambert.
Premier Michael Baird has been reluctant to commit to a change, saying only that it would be considered in the June budget.
Treasurer Andrew Constance didn't rule out changes.
But he said any alteration would need to take place within the context of the budget, supported by "the proper economic analysis".
"We've had no explanation (from Mr Foley) as to where this money's coming from," he said.
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