Public Protector Busisiwe Mkhwebane ordered the Gauteng Gambling Board in May to stop the 3percent levy paid to Phumelela.
The group said in a trading update on Friday that the levy had been withheld from April 1, depriving it of income of more than R6million a month, on average. Phumelela expects this to negatively impact its profits by R75m a year.
The group has challenged the public protector's findings. On June 21, it lodged papers in the North Gauteng High Court to have the report into thoroughbred horse racing in Gauteng set aside on the basis that the findings of the public protector in the report were unlawful, irrational, unreasonable and unconstitutional.
The group also admitted that it is in breach of covenants in respect of its R300m on its borrowings.