The Horserace Betting Levy Board Explained – How Bookmaker Profits Fund Racing
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Most punters I know think of the Levy as a vague tax that exists somewhere in the background of horse racing, relevant to the industry but not to them. I thought the same until I realised that the Levy directly determines the prize money on the races I bet on every Saturday, the quality of the fixtures I watch, and the long-term viability of the sport I’ve built a career around analysing. If you bet on British horse racing, the Levy is your money circulating back through the sport. Understanding how it works isn’t academic – it’s practical.
The 10% Levy – Who Pays and How It Is Collected
The Horserace Betting Levy is a statutory charge of 10% applied to the gross profits that bookmakers earn from bets on British horse racing. The threshold is GBP500,000 in annual profits – operators below that level are exempt. Above it, every pound of profit on British racing generates 10p for the Levy Board. The mechanism has been in place since the Betting Levy Act of 1961, though the rate and collection method have been reformed multiple times, most recently in 2017 when the levy was extended to cover offshore operators serving UK customers.
In 2024-25, the Levy yielded a record GBP109 million – up from GBP105 million the previous year and GBP100 million in 2022-23. Grainne Hurst, CEO of the Betting and Gaming Council, highlighted the achievement: four consecutive years of record contributions, demonstrating what she described as “the growing, long-term investment regulated betting provides British horse racing.”
The record yield is genuine good news for racing, but it comes with a caveat that the headline obscures. Betting turnover on horse racing has been falling – by GBP3 billion in real terms since 2022. The Levy yield has risen because bookmaker profit margins on racing have widened, not because punters are betting more. Higher margins mean the 10% charge generates more revenue even as the underlying market contracts. Whether this dynamic is sustainable is one of the most important questions facing British racing.
The collection is administered by the Horserace Betting Levy Board (HBLB), an independent body established by statute. Bookmakers report their racing-specific profits quarterly, and the HBLB audits these returns. The system is mandatory for all licensed operators offering bets on British racing – there’s no opt-out, and non-compliance carries enforcement consequences through the Gambling Commission.
Where the Money Goes – Prize Money, Fixtures, and Grants
The HBLB allocates Levy funds across three main areas: prize money, the fixture programme, and non-fixture grants. For the 2026 financial year, the Board committed GBP77.1 million to prize money – the single largest allocation, including GBP4.4 million in additional funding above the baseline. This money flows directly to racecourses, which distribute it as prize money in Levy-funded races. Without it, prize pools would shrink dramatically, fewer owners would find it economically viable to run horses, and the fixture programme would contract.
Fixture financing supports the infrastructure that makes racing possible: the raceday staffing, the veterinary services, the integrity monitoring, the photo finish equipment. Some racecourses – particularly smaller, independent venues – rely on Levy-funded fixture contributions to break even. Remove that support and the fixture list gets shorter, starting with the midweek and evening meetings that provide bread-and-butter betting opportunities for regular punters.
The HBLB also confirmed GBP11 million in non-fixture grants for 2025, including GBP3.62 million for a national marketing campaign aimed at broadening racing’s audience. Other grants support equine welfare, veterinary science, breeding industry research, and racecourse infrastructure improvements. The grant programme is less visible than prize money but arguably as important for the sport’s long-term health – it funds the things that don’t show up on a racecard but make racing possible.
Record Levy, Falling Turnover – The Paradox
Here’s the tension at the heart of the Levy’s success story. Turnover is falling while yield is rising. That means bookmakers are keeping a larger share of each pound wagered – their margins are widening – and the Levy’s 10% captures more from those higher margins. For the Levy Board, this is positive: more money for racing. For punters, it’s less positive: wider margins mean you’re getting worse value on every bet you place.
The paradox runs deeper. If affordability checks and regulatory pressure continue to reduce the number of active bettors and the amounts they stake, turnover will keep falling. At some point, declining turnover will outpace widening margins, and the Levy yield will start to fall too. The racing industry is watching this curve nervously, knowing that the record yields of 2024-25 may represent a peak rather than a trend.
Offshore and unlicensed operators compound the problem. Since 2017, the Levy applies to all operators serving UK customers, including those based overseas – but only if they hold a UKGC licence. Unlicensed operators, whose traffic has grown 522% since 2021, pay nothing. Every pound wagered on the black market is a pound that generates zero Levy income, zero prize money contribution, and zero support for the sport’s infrastructure.
Why the Levy Matters to Punters, Not Just the Industry
The connection between the Levy and your Saturday betting slip is more direct than it appears. Higher prize money attracts more runners, which creates more competitive races, which generates better betting opportunities. A well-funded fixture programme means more meetings across the year, giving you more races to bet on. The marketing campaigns funded by Levy grants bring new fans to racing, which increases betting volume, which grows the Levy pot, which funds more prize money. The cycle is circular and self-reinforcing – when it works.
When the cycle breaks – when turnover falls, when the Levy contracts, when prize money drops – the effects flow in reverse. Fewer competitive races, less interesting betting, lower engagement, lower turnover. The BHA has already projected that the number of races in 2027 could decline by 6-7% compared to 2024, a reduction that would directly reduce betting opportunities for every UK punter.
As a bettor, you don’t pay the Levy directly. The bookmaker pays it from their profits. But those profits come from the margin built into the odds you’re offered, which means you’re funding the Levy indirectly through every bet you place. Understanding this relationship doesn’t change how you bet, but it does explain why the health of the regulated betting market matters to everyone who enjoys horse racing betting in the UK – and why the growth of unlicensed alternatives threatens the ecosystem that makes the sport possible.
Do offshore bookmakers pay the horserace betting levy?
Licensed offshore bookmakers that hold a UKGC remote operating licence are required to pay the Levy on their profits from British horse racing. This has been the case since the 2017 reform. However, unlicensed offshore operators – those without a UKGC licence – do not pay the Levy, which is one reason why the growth of the unregulated market directly undermines racing’s funding.
Has the levy rate always been 10%?
No. The Levy rate was historically negotiated annually between the racing and betting industries, and it varied considerably over the decades. The 2017 reform fixed the rate at 10% of gross profits above the GBP500,000 threshold, replacing the annual negotiation with a statutory mechanism. Before 2017, the effective rate was often lower and subject to dispute between the two sides.
Prepared by the Horse Racing Game Betting editorial staff.
