The State Government is facing growing internal opposition at the prospect of selling the TAB, with a Liberal MP breaking ranks to speak out against it.

The Government has flagged selling the state-owned betting agency as part of a raft of privatisations to reduce state debt, but says it will not be part of an initial group of assets sold.

Belmont MP Glenys Godfrey has told Parliament selling the TAB would lead to short-term gains, but cause pain in the long run.

"It provides our budget with an ongoing income stream worth millions of dollars a year and it's an asset that supports an important industry - important through its contribution to the tourism industry and through the tens of thousands of Western Australians it employs," she said.

"If selling the TAB reduced investment in horse racing infrastructure, then we're missing a great opportunity to promote Western Australian racing to Asia."

Some WA Nationals MPs have also rejected the idea, saying they fear it would hurt regional racing.

Nationals leader Terry Redman said last month he was yet to be convinced about the merits of selling the TAB.

He said while asset sales were important to improve the state's finances, he was "unconvinced yet that we need to look at the TAB".

The TAB injects more than $126 million into the WA racing industry each year and many have raised concerns that privatising the betting agency could put that funding in jeopardy.

WA is now the only Australian government to own a bookmaking business after the ACT sold its TAB for more than $105 million.