Every Bet on British Racing Funds the Sport
The horserace betting levy is the financial link between the betting industry and the racing sport it depends on. Every bookmaker with annual gross profits exceeding £500,000 on British horse racing pays 10 per cent of those profits into a central fund administered by the Horserace Betting Levy Board. That fund — which reached a record yield of approximately £109 million for the year ending March 2025, according to the HBLB’s annual report — is then distributed back into the racing industry to support prize money, horse welfare, racecourse infrastructure, and the integrity services that keep the sport clean.
For bettors, the levy is invisible at the point of transaction. You don’t see it deducted from your stake or winnings. But it shapes the sport you bet on in ways that are both direct and measurable: the prize money that attracts top horses to British races, the welfare programmes that care for them when they retire, and the anti-doping and anti-corruption measures that protect the integrity of the results you’re betting on.
How the 10% Levy Works
The legal basis for the levy dates back to the Betting Levy Act 1961 and the Betting, Gaming and Lotteries Act 1963, though the system was substantially reformed in 2017. The Horserace Betting Regulations 2017 extended the levy to all operators offering bets on British racing to customers in Great Britain — including offshore operators — and fixed the rate at 10 per cent of gross profits.
Gross profits, for levy purposes, means the amount staked minus the amount paid out in winnings. If a bookmaker takes £1 million in bets on British racing in a given period and pays out £900,000 in winnings, the gross profit is £100,000 and the levy due is £10,000. The calculation is applied across the operator’s entire British racing book, not race by race. A bad Cheltenham for the bookmakers — where punters win more than expected — reduces the gross profit and therefore the levy. A bookmaker-friendly festival does the opposite.
The extension to offshore operators was critical. Before 2017, only operators with a UK licence and UK-facing operations were liable. The reform closed a loophole that had allowed offshore bookmakers to profit from British racing without contributing to its upkeep. The result was a significant increase in levy income: from approximately £50 million in the years before reform to the current level above £100 million.
Levy payments are made quarterly, with reconciliation at year-end. The HBLB publishes annual accounts detailing levy income, expenditure, and reserves. The transparency of the process — every figure is publicly available — is one of the system’s structural strengths.
Where Levy Money Goes: Prize Money, Welfare, Integrity
The majority of the levy — approximately 90 per cent — is applied to the improvement of horseracing, which in practice means three primary areas.
Prize money receives the largest share. The HBLB contributes directly to race purses at meetings across Britain, supplementing the funds provided by racecourses and sponsors. In 2024, the Levy Board increased its contribution to support the introduction of Premier racedays — a tiered fixture system designed to concentrate quality and investment at the sport’s biggest meetings. The prize money contribution is not evenly distributed; it’s targeted to support both the top end of the sport and the grassroots, with specific allocations for different fixture types and racing codes.
Horse welfare is the second significant beneficiary. The levy funds research into equine health, supports the Retraining of Racehorses charity (which rehomes retired thoroughbreds), and contributes to veterinary services at racecourses. These programmes are not discretionary — they reflect a statutory obligation that levy funds be applied for purposes including “the improvement of breeds of horses” and “the advancement or encouragement of veterinary science or veterinary education.”
Integrity services cover the costs of maintaining fair competition. Drug testing, course inspections, stipendiary stewards, and the BHA’s intelligence and investigations team all receive levy funding. In a sport where the betting product depends entirely on public confidence in the fairness of results, the integrity budget is not a cost — it’s the foundation on which everything else rests.
Record £109M Yield — and Why It’s Under Threat
The levy yield of approximately £109 million in 2024–25 was a record under the current framework and the fourth consecutive year of increase. On the surface, this looks healthy. Beneath it, the picture is more complicated.
The record yield was achieved despite a decline in total betting turnover on British racing. Turnover fell 4.2 per cent in the first nine months of 2025 compared with the same period in 2024, and 12.8 per cent compared with 2023. The levy rose because bookmaker gross profits — the basis of the levy calculation — were bolstered by results that favoured the bookmakers, particularly during the 2025 Cheltenham Festival. When punters lose more, the gross profit increases, and so does the levy. This is not a sustainable model for growth — it depends on outcomes, not volume.
The Treasury’s proposal to harmonise remote gambling duties — potentially raising the tax on online horse racing betting from 15 per cent to 21 per cent — represents the most direct threat to the levy’s future. Research commissioned by the British Horseracing Authority estimated that a harmonised rate of 21 per cent could cost the racing industry £330 million over five years. Brant Dunshea, Chief Executive of the BHA, described the proposal as posing “one of the gravest risks to horseracing the sport has ever seen,” warning that “the horseracing industry is already in a precarious financial position.”
Higher taxes on bookmakers would compress gross profits, which would reduce the levy yield, which would reduce the money available for prize money and welfare. The circularity is direct: tax the bookmaker more, the sport receives less.
The Future of the Levy
The levy was due for a government review by 2024, as committed in the April 2023 gambling White Paper. At the time of writing, that review has not produced public conclusions. Industry stakeholders — including the BHA and the Racecourse Association — have called for changes to the levy’s scope, arguing that it should be extended to cover bets placed on international racing and virtual racing, not just British fixtures. These extensions would broaden the base and reduce the sport’s dependence on a single revenue stream tied to domestic turnover.
The HBLB itself has adopted a cautious stance, maintaining reserves of £58.7 million and resisting calls to materially increase annual distributions on the back of short-term income swings. The Board’s position is that releasing additional funds based on a record year driven partly by bookmaker-friendly results would be unsustainable if the next year’s results swing the other way.
For bettors, the levy’s future matters in practical terms. If levy income falls, prize money declines. Lower prize money reduces the incentive for owners and trainers to keep horses in training. Fewer horses mean smaller fields. Smaller fields make racing less competitive and less attractive to bet on. The levy is not just a financial mechanism — it is the circulatory system that keeps the relationship between betting and racing alive. Its health determines the health of the sport you watch, attend, and wager on.