The NSW racing industry's tax cut on bets is a "freebie" that comes at the expense of the community, opponents say.

The tax on every $100 wagered will be slashed by more than half from $3.22 to $1.28, Deputy Premier and Racing Minister Troy Grant announced on Tuesday.

The tax cuts will bring the rate for thoroughbred, harness and greyhound racing into line with Victoria by 2020.

Mr Grant said the cuts would return $235 million to the industry, which is worth $3.3 billion a year to NSW, over the next four years.

But opponents have slammed the decision.

NSW Greens upper house MP John Kaye said the coalition could spend the money on employing 850 new teachers or 850 new nurses.

Addiction Intervention CEO Chantale Ishac said the Baird government could have helped the economy by investing in early intervention and therapy.

"Gambling addiction costs our society, be it in work productivity, job loss, family breakdown, family court, high suicide rates, increased cost on our health system.

"The flow on effect is incalculable."

Australian Churches Gambling Taskforce spokesman Mark Zirnsak said the decision demonstrated the gambling industry's influence over the government.

"They get a freebie at the expense of the community," he told AAP.

"The money could be used for health services, education, roads ... there's no shortage of other things."

The tax cuts are part of plans to turn The Championships, a key part of Sydney's autumn racing carnival, into an event to challenge the Melbourne Spring Carnival.

Racing NSW welcomed the announcement.

"In the two years we've had The Championships it's grown considerably - if it continues to grow at this rate we'll certainly be giving the Melbourne Cup a good nudge as the best racing event in Australia," Racing NSW chief executive Peter V'landys told 2GB.

Labor leader Luke Foley, who proposed the tax cut in January as a key election priority, said the government was "on the right track".

But he said the changes should be included in the coming budget rather than in stages.

"It will be another four years until the NSW racing industry actually reaches parity with Victoria," he said.