Wagering giant TAB Ltd has lauded the NSW government's push to ban online betting exchanges, saying it was time to crack down on "parasites" who returned nothing to the industry.

But Betfair, a UK-based betting exchange that is trying to break into the Australian market, said the push robbed punters of competitive odds and was about protecting TABs.

NSW Minister for Gaming and Racing Grant McBride called for the ban on Thursday following the release of a state-by-state report by the Betting Exchange Task Force.

He said the task force, whose report had not yet been made public, confirmed his original views that licences should not be awarded to betting exchanges.

He said exchanges compromised the industry's integrity and robbed it of financial returns.

"The task force has confirmed my original views that the introduction of betting exchanges in Australia will have serious repercussions for our racing industry," Mr McBride said in a statement.

"I am concerned they will compromise the integrity of the industry and risk its viability."

Mr McBride said he would recommend the federal government amend its Interactive Gaming Act to ban betting exchanges from operating in Australia.

Betfair's director of communications Mark Davies said the exchange would have no problem returning funds to the industry but being licensed was a precondition for that.

"This represents a raw deal for the average Australian punter who should be entitled to competitive odds, the transparency of an online wagering environment and the integrity afforded by Betfair's unparalleled electronic audit trail," Mr Davies said in a statement.

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