Racing Minister Winston Peters has announced the Budget will include $72.5 million in emergency support for the racing industry.
The package includes $50m for the Racing Industry Transition Agency, with $26m of that to pay its outstanding supplier bill, which Peters said it had not been able to do because of strangled revenue.
Another $20m - from the Provincial Growth Fund - would go towards building two new all-weather synthetic racing tracks, initially planned for Awapuni in Manawatū and Riccarton Park in Christchurch.
The remaining $2.5m would go to the Department of Internal Affairs to fast-track work on online gambling.
Peters said the industry had been hit hard by Covid-19, made worse by an already weak financial position.
"This has created the perfect storm ... we can't gild the lily, it's taken the industry to the brink of insolvency; it's a matter of urgency for the government to provide support," he told reporters at a media conference.
"Government will also consider recapitalising the industry to help promote a quicker recovery and achieve a greater economic outcome," he said.
"There is a genuine risk of insolvency and the industry losing the future gains of its reforms."
Peters said past studies indicated the industry contributed $1.6 billion to the economy each year.
"There are 15,000 full-time racing industry jobs and nearly 60,000 jobs which participate in the industry in some shape - from vets to equipment suppliers, and owners. New Zealand bloodstock is world class and a significant export earner."
Peters denied it was a government "bailout" for a betting agency.
"The betting agency's mask and shape and future is being worked on seriously hard as well."
He was asked why racing was getting money when so many other industries are in strife, like tourism and hospitality.
"I personally, seriously supported the SME package, to a greater amount than was originally conceived... I supported the huge package to carry the wage earner through this crisis and further plans to do that as well.
"Dare I say it I supported the $50m to media in this country with further consideration downstream, so it's the same approach, if we can possibly save an industry we're going to do our best to do so."
The rest of the money in the package would be spent on fast-tracking work on raising more revenue through online gambling.
"Covid-19 has also impacted on funding available to community and sport organisations which receive a share of gambling revenue. There has also been an increase in New Zealanders gambling offshore throughout online platforms," Peters said.
"Both trends are concerning. For that reason the government is fast tracking a programme of work by the DIA to re-evaluate the gambling framework of our community, sporting, and racing groups."