A punter betting on the Miles Franklin literary award gets to enjoy their windfall tax-free, unlike the winning author who pays a significant chunk of their $60,000 prize.

The same is true for many prestigious arts awards, such as the $100,000 Archibald Prize for portraits.

Making arts prizes, grants and fellowships tax-free is a widely supported measure among those to be discussed at the NSW government's landmark arts tax summit at the Sydney Opera House on Friday.

Other ideas thrown up in more than 300 submissions to the forum include a national lottery to fund arts and culture, and increasing the tax deductibility of arts donations to 150 per cent.

Australia's creative industries are worth more than $122 billion according to the NSW government, yet figures from Creative Australia sh

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