Trainers contributed £98.6m and stud farms £81.2m, while visitors bring in £8.8m to the racecourses.
Forest Heath District Council commissioned research company SQW to carry out the study into the impact of the sport on the 'Home of Horseracing'.
The SQW report did not try to measure the amount spent by owners and visitors at local shops and on services.
The council said the survey, commissioned along with the Newmarket Horsemen's Group (NHG), aimed to "understand the scale and economic significance" of the industry.
SQW report
William Gittus, chairman of the NHG, said: "It's a global industry and we are keen to attract global investors and to develop planning and economic policy.
"We who work in the industry know it's very valuable to the local economy, but we needed to provide concrete evidence to people who make those policy decisions."
Councillor James Waters, Conservative leader of the the Council, said: "We have never before had an independent, fact-based report on exactly what impact the horse racing industry has on Newmarket.
"It looks at the impact of racing up to 25 miles away, so will be a really useful document as we plan future growth in west Suffolk."
The survey did not attempt to calculate how much visitors or people in the racing industry spent in the town centre.
Trainer John Gosden said: "Obviously the report has been very careful to never have any figures challenged and I think they've underestimated the financial contribution to the region, but they didn't have access to people's private accounts.
"What we have had here in the last 15 years is an incredible investment from the Middle East and Far East."
Kevin Pearson, from Golding clothing shop and a member of the Newmarket Retailers Association, said: "The majority of horse owners and training staff do shop locally and this adds to the vibrancy of the high street."
The horse racing industry is worth £208m a year to the economy in and around Newmarket, a study has revealed.