Australian authorities said Monday they now suspected there were hundreds of cases of equine flu in the country, deepening the crisis in the multi-billion-dollar horse-racing industry.
Officials warned that the unprecedented outbreak -- which comes at the start of the thoroughbred breeding season and ahead of the Melbourne Cup, the country's most prestigious race -- could have a damaging impact on the economy.
"Horse racing is a very important industry to Australia when you take into account breeders, trainers, jockeys, race meetings," Treasurer Peter Costello said.
"And the fact that we have had this outbreak of horse flu is very serious. It will affect the economy."
The government Monday extended a nationwide ban on all racing and transport of horses until Friday in a bid to contain the spread of the virus which has infected horses in New South Wales and Queensland.
In New South Wales, where the virus first appeared in the state capital Sydney on Friday, the ban is open-ended because 51 horses have tested positive for the disease and a further 415 have displayed symptoms.
The head of Racing New South Wales, Peter V'Landys, has put the total potential cost at more than one billion dollars (833 million US).
"People think the racing industry is the sport of kings but there are hundreds of stable-hands, track riders and uni students who are casual employees," V'Landys said.
"In 72 hours we have lost four or five million dollars in income to the racing industry."
The outbreak has gripped the sports-mad nation, where gambling on the races is a Saturday habit for many. Horse racing has an annual turnover of 20 billion dollars and employs tens of thousands of people.
Betting companies have already lost millions of dollars in turnover because of the cancellation of last Saturday's major races and expect additional losses if racing does not resume next weekend.
The full impact of the horse flu outbreak is still being assessed, but one economist said it would be felt across the country.
"If you do have some regional trotting and thoroughbred meets which are cancelled, the owners of the horses don't get the income in, so then they can't spread it through the regional community," said Craig James, chief economist at Commonwealth Securities.
"It has knock-on effects through a whole range of businesses right the way across Australia."
Racing, thoroughbred breeding and recreational riding have been in turmoil since the first case of suspected equine flu was detected on Friday.
The outbreak has triggered fears that this year's spring racing carnival, which includes the 'Race That Stops The Nation', the Melbourne Cup, could be put back from its scheduled date of November 6.
But officials in Melbourne said they were confident that racing could resume this weekend.
"I'm very confident that the Melbourne Cup and also the Spring racing carnival should proceed on the normal days in Victoria," Racing Minister Rob Hulls said.
In Queensland, where at least one horse was confirmed to have the virus and 12 more were showing flu-like symptoms, officials were less optimistic.
"It's better to cancel a few events and get the industry back on its feet than try and placate people and end up with the industry being out for months," Queensland Premier Peter Beattie said.