South Australian racing and the Adelaide autumn carnival have been dealt a body blow by the state government's multi million funding cuts to the industry.

Thoroughbred Racing South Australia says it has been forced to cut $2.25 million from critical infrastructure projects while the government has withdrawn $3 million funding for the carnival.

It means SA will no longer have any $1 million races with its premier sprints,the Goodwood and the Robert Sangster Stakes, reduced to $750,000 and $600,000 respectively because of the impact of the point of consumption tax.

The races have attracted interstate trainers with Victorian Anthony Freedman winning both this year with Santa Ana Lane (Goodwood) and Shoals (Sangster).

"Because South Australia's POC tax rate of 15 per cent is significantly higher than Australia's two largest states (NSW 10 per cent and Victoria eight per cent), there is far less incentive for bookmakers to promote SA racing," TRSA said in a statement.

"Instead, they actively promote other states' racing ahead of SA due to the higher POC tax rate, resulting in a significant downturn in the local industry's revenues."

The state government announced a one-off return in June of $4.85 million to the racing industry but there have been no further assurances of any future reimbursement.

Frances Nelson QC, chair of Racing SA and Thoroughbred Racing SA, described the cuts forced on the industry as "deeply regrettable but unavoidable".

"With the exclusion of Tasmania, every other state has now introduced a consumption tax. Each has recognised that it is money generated by the racing industry, and all have returned funding to the industry - but not in South Australia," Nelson said

"Thoroughbred Racing SA works to grow racing on behalf of the entire racing community ... an industry that supports the full-time employment of more than 3600 people and generates $400 million every year in economic benefits for the state.

"It is also an industry where participants depend on prize money, which drives involvement and helps pay the wages of every participant at every level.

"We have had no choice but to announce these significant cuts to infrastructure grants for clubs and reductions in prize money because of the way racing is being underfunded and unfairly taxed by the state government."

Nelson said the cuts were initial steps and it was possible some race dates would have to be removed.

"All we want is a level playing field to ensure the South Australian racing industry can compete sustainably on its own terms and protect its own future," she said.