Signalling a possible public inquiry into the epidemic, Agriculture Minister Peter McGauran said quarantine failure was a logical conclusion to make, but it would be some time before investigators could make firm conclusions.
"It was a breach of quarantine in all likelihood. It may have been human error of deficiencies in the standards of quarantine," McGauran said. "Our inquiry is looking at both.
"Whether or not the public interest will be served by having a public inquiry is something we will consider."
Investigations have focused on a government quarantine facility on the western outskirts of Sydney, and McGauran has indicated the outbreak "almost certainly" came from Japan.
The Australian newspaper reported Saturday that investigators were also probing whether infection happened earlier through a person who travelled with infected horses from overseas or came into contact with them at Sydney airport.
If proven, it would clear the government-run facility of blame, the daily said, without providing a source for the report.
Equine influenza is a highly contagious virus that is harmless to humans but causes respiratory problems, fever and sometimes death in horses. The recent outbreak is the first ever in Australia.
The government investigation was expected to focus on the quarantine station, where the virus was detected after some breeding stallions arrived from overseas in early August.
It has since spread to stables at Sydney's top track Randwick, forcing the cancellation of spring races and crippling the multi-billion dollar industry for almost a week as authorities try to contain the outbreak.
Racing in the states of New South Wales and Queensland has been shut down indefinitely, with horse movement at a standstill. McGauran said Saturday the government was also considering a wage-subsidy scheme to help affected workers.