McDonald, the retained rider in Australia for Sheikh Mohammed bin Rashid Al Maktoum's global Godolphin racing empire, had his contract torn up after he was banned for 18 months on Thursday for having an interest in a bet on a horse he rode to victory last year.

McDonald netted just $4000 from Astern's win on debut last year – part of $125,000 well known Sydney punter Anthony Gardiner collected on the result.

McDonald, 24, won't be allowed to return to the saddle until May 15, 2018, meaning he will miss the next two autumn carnivals and next year's spring extravaganza.

The ex-pat Kiwi is one of the highest paid athletes based in Australia and was thought to be on a near seven-figure retainer to don the famous royal blue colours of Godolphin, who left the door ajar for a return.

"Godolphin agrees that there must be zero tolerance of any breaches of the prohibition on betting by a jockey," it said in a statement.

"Godolphin has advised James McDonald that, as he is disqualified, he will be released from his current contract with immediate effect. This decision has been accepted by James.

"We will continue to support him throughout his suspension. His long-term future with Godolphin will be reviewed in due course by His Highness Sheikh Mohammed."

Considering his mounts during the last racing season scooped almost $15 million in prize money alone – of which jockeys earn five per cent – McDonald earns more than the highest profile football stars in Australia.

McDonald's legal counsel Matthew Stirling said an appeal will be lodged after stewards docked six months from the mandatory two-year disqualification for the rider's "co-operation, remorse, size of the bet and first offence".

The appeal needs to be lodged by the close of business on Wednesday.

I made a mistake betting and broke the rules.I accept responsibility for that.But I am so disappointed with the penalty and will appeal.— James McDonald (@mcacajamez) December 22, 2016

McDonald declined to comment upon leaving the inquiry, but later released a statement.

"I made an error of judgment betting on Astern when I rode it and broke a rule of racing," McDonald said. "I accept full responsibility for that.

"But I am extremely disappointed with the penalty and I will be appealing. I will be back riding and hopefully sooner than later. It is not appropriate that I say anything else until the appeal is over."

An inquiry heard associates of McDonald placed bets to win almost $1 million on Astern across several of the country's biggest races including the Golden Slipper and Golden Rose.

He received $4000 from Gardiner, who has been warned off all NSW racetracks for his failure to co-operate with stewards' investigations, after Astern's win at his first start last December, in which he was backed from $4.60 into $3.50.

Stirling told the inquiry McDonald has since donated the money to a children's charity.

But the stewards' probe, which saw McDonald monitored for his interaction with Gardiner moments before this year's Tramway Stakes, prompting a warning behind the barriers that he was being scrutinised, extended to the Golden Slipper and Golden Rose.

The inquiry was told Gardiner backed Astern to win a total of $650,000 in a string of Golden Slipper and multi bets ranging from two days before the colt debuted to race morning. Astern finished 11th behind Capitalist.

Another associate of McDonald, separate to Gardiner, placed a number of pre-post bets to win $25,000 on Astern in the Golden Rose two days after a barrier trial and prior to the three-year-old's Run to the Rose win.

Astern, who is one of the most valuable horses in Australia and will most likely stand at stud next season, went on to win his first group 1 in the Golden Rose. But stewards were satisfied McDonald didn't receive any cut from the winning bet.

The stewards' investigation into McDonald, alongside the Australian Criminal Intelligence Commission, escalated on September 3 when they observed him acknowledging Gardiner at the exit to the tunnel that leads onto the Randwick track before the Tramway Stakes.

Stewards warned McDonald behind the barriers they were aware of the exchange before the race started.

Gardiner had walked into the public betting ring and plonked $10,000 at $4 on Dibayani, who ran third beaten less than a length, as McDonald stormed down the outside to win aboard Hauraki.

Chief stipe Marc van Gestel said Gardiner was seen receiving acknowledgement from several jockeys as they paraded on their mounts in the Theatre of the Horse before the Tramway Stakes, prompting stewards to track the punter's movements in the betting ring.

Stewards warned McDonald not to speak to Gardiner after his riding finished on the day, but the pair were still in daily contact "up to two or three times a day" thereafter.

Stirling said McDonald had ceased his relationship with Gardiner and ignored repeated phone calls in recent weeks from the punter, known as "the tennis player", who had even shown up at the jockey's house where he was told to leave by the hoop's brother.

Stirling argued McDonald's admission, remorsefulness and co-operation warranted a "two- to three-month" ban plus a fine.

Gardiner had still not met stewards' request to be interviewed.

Stewards were also miffed they could not forensically retrieve phone data logging communication between McDonald and an associate other than Gardiner between October 5 last year and December 6, the day after Astern's debut success.