Green’s Dictionary of Slang

exciting, dramatic, ‘hot’.

1901		Sydney Sportsman (Surry Hills, NSW) 12 June 2/7: The Dougherty-McFadden set-to [...] was tabasco sauce from the fall of the flag.
1915		O.O. McIntyre New York Day by Day 4 June [synd. col.] Songs in French that none but an expert in the French vernacular can understand, but they are said to be all to the tabasco.
1925		Wodehouse Carry on, Jeeves 8: Uncle Willoughby had been somewhat on the tabasco side as a young man.
1926		(con. 1900s) J.B. Booth ‘Master’ and Men 296: Things did get a bit tabasco.