Commercial kangaroo harvest contributes to sustainable regional communities and rangeland environments by bringing social, economic and environmental benefits. However, the South Australian kangaroo industry is not delivering these benefits to its potential capacity. South Australian harvest rates are lower than any of the other states, but demand from South Australian kangaroo meat processors for product is high. Therefore, low harvest rates cannot be explained by insufficient demand. This paper describes the factors that contribute to low harvest rate in South Australia, with particular attention to institutional and economic factors. Institutional reform of the South Australian kangaroo management system, including the introduction of competition, incentives and training, is required for the industry to provide greater environmental, social and economic benefit to South Australian regional communities.