High-profile racehorse owner Damion Flower will have to show cause why he should be allowed to participate in the thoroughbred industry and also why he should keep his slot in The Everest, Australia's richest race.

Flower has been charged with serious drug offences and Racing NSW has moved to enforce a rule relating to integrity saying horses he owns or part-owns may continue to race but any prize money earned will be frozen.

Flower, who faces a bail hearing next Wednesday, will not be allowed to participate in the industry in any way pending the determination of the charges against him.

"On Thursday, 23 May 2019, Racing NSW was informed that thoroughbred racehorse owner Mr Damion Flower had been issued with serious charges relating to importing a commercial quantity of a border-controlled drug," Racing NSW said in a statement.

"Racing NSW acted immediately to protect the integrity, image and interests of thoroughbred racing by issuing a show cause notice to Mr Flower on that day, which has been served on his representative, requiring him to show cause as to why the provisions of AR23 should not be imposed against him in respect of his ongoing participation in the thoroughbred racing industry.

"In this respect, it is important to note that the stand-down conditions under AR23 are intended to protect the integrity, image and interests of thoroughbred racing while charges are being determined against a person and Racing NSW is in no way prejudging the charges against Mr Flower nor interfering with his entitlement to the presumption of innocence."

Flower bought a slot in The Everest for three years with the race to be run in October for the third time.

In imposing conditions on his horses, Racing NSW said Flower's registered red racing colours with white spots could not be used in barrier trials or races.

"Mr Flower, if granted bail, is not permitted to have any participation in thoroughbred racing including not being able to enter racecourses, training tracks, training premises, not being able to be employed by, or otherwise engaged to provide any service in any capacity to any thoroughbred racing stable, not being able to share in the winnings of any horse and not being able to otherwise participate in any way in the preparation for racing or training of any horse," Racing NSW said.

The administrative body says it intends to forfeit Flower's slot in The Everest but no decision has been made as to how it will be re-offered.

The slot holders negotiate with owners and trainers to race a horse in The Everest in their names.

"No matter what the circumstances, Racing NSW will provide due process and natural justice to its participants," Racing NSW chief executive Peter V'landys said.

"Accordingly, I stress that we are not pre-judging Mr Flower's case who is entitled to the presumption of innocence and will be given every opportunity to respond to the show cause notice issued by Racing NSW when he is able to do so.

"However, in the interim, it is critical that the integrity, image and interests of thoroughbred racing in New South Wales be protected which is why Racing NSW has imposed interim conditions on Mr Flower's participation in the thoroughbred racing industry.

"It is also important that other racing participants that race horses with Mr Flower are not unfairly prejudiced as a result of the charges against Mr Flower.

"The interim conditions have been framed so that those persons, who are not involved and need to be treated accordingly so as they are not disadvantaged due to circumstance beyond their control, can continue to train and race horses."

Flower rose to prominence in racing with Group One-winning horse Snitzel who is now Australia's champion stallion.

He has spent a reported $4.5 million on a training establishment at Hawkesbury Racecourse.