The Horse Racing Betting Levy Explained: How Your Bets Help Fund the Sport
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Every Bet You Place Funds a Piece of British Racing
Most punters never think about where the money goes after a bet is settled. You win, you collect. You lose, the bookmaker keeps your stake. That is the transaction, and it feels complete. But behind the scenes, a percentage of what bookmakers earn from horse racing bets is siphoned off and returned directly to the sport. That mechanism is the Horserace Betting Levy, and in the 2024-25 financial year, it collected a record 108.9 million pounds.
The levy is unique to horse racing. No other sport in Britain has a statutory right to a share of bookmakers’ profits from bets on its events. Football does not receive a cut of football betting revenue. Tennis does not benefit from Wimbledon wagers. Horse racing does — and that financial link is one of the structural foundations that makes British racing possible at its current scale.
How the Statutory Levy Is Calculated and Collected
The levy was reformed in 2017, replacing a negotiated annual rate with a statutory framework. Under the current system, all bookmakers who take bets on British horse racing — whether based in the UK or overseas — are required to pay the levy. The rate is set at 10 percent of a bookmaker’s gross profits from horse racing, after certain deductions.
Gross profits, in this context, means the amount retained by the bookmaker after paying out winning bets — essentially the bookmaker’s revenue from racing markets. A bookmaker that takes 10 million pounds in horse racing bets and pays out 9 million in winnings has a gross profit of 1 million pounds, and owes 100,000 pounds in levy.
The Horserace Betting Levy Board — the HBLB — is responsible for collecting the levy and distributing the funds. It is an independent body, established by statute, with a board that includes representatives from racing, bookmaking, and independent members. The HBLB’s role is to ensure the levy is collected efficiently and allocated in ways that benefit the sport as a whole.
The 2017 reform was significant because it brought offshore operators into the levy framework for the first time. Previously, bookmakers licensed in jurisdictions like Gibraltar or Malta could take bets on British racing without contributing to the levy. The statutory basis closed that loophole, ensuring that any operator accepting UK customers’ bets on British racing pays its share.
Where the Money Goes: Prize Funds, Welfare, Integrity
The HBLB allocated an additional 4.4 million pounds to prize money for 2026, reflecting the record levy yield. But prize money is only one of several destinations for levy funds. The money flows into four broad categories, each essential to the sport’s functioning.
Prize money is the largest single allocation. The levy supplements the prize money funded by racecourses and sponsors, ensuring that races at all levels of the sport carry sufficient reward to attract runners. Without levy contributions, prize money at lower-tier meetings would be too small to justify the cost of training and transporting horses. The levy effectively subsidises the bottom half of the racing programme, keeping the breadth of British racing viable.
Horse welfare receives significant funding. The levy supports veterinary research, horse rehabilitation programmes, and the care of retired racehorses. This allocation has grown in recent years as public concern about equine welfare has increased — BHA research through Project Beacon identified welfare concerns as one of the key barriers preventing new audiences from engaging with the sport.
Integrity services are funded by the levy to maintain public confidence in the sport’s fairness. This covers the BHA’s integrity department, which investigates suspicious betting patterns, enforces rules on corrupt practices, and liaises with the Gambling Commission on matters where betting and racing intersect. Without robust integrity services, the betting market that generates the levy in the first place would lose credibility.
Improvement of breeds and veterinary science completes the allocation framework. Research into equine health, genetic studies, and training methodologies are all partly funded by the levy. These investments improve the quality and safety of racing over the long term.
Record Yield, Falling Turnover: The Levy Paradox
Alan Delmonte, the HBLB’s Chief Executive, noted that February and March 2025 produced significantly higher than usual bookmaker gross margins, with March shaped by particularly bookmaker-friendly outcomes at the Cheltenham Festival. That observation highlights a paradox at the heart of the levy’s current health.
The record yield of 108.9 million pounds was achieved despite falling betting turnover. Overall turnover on British racing dropped 9 percent in Q1 2025 and has declined by approximately 12.8 percent since 2023. The levy is healthy not because more money is being bet on racing, but because bookmakers are retaining a higher percentage of what is bet. Higher margins — driven by fewer high-staking customers, reduced promotional spending, and results that favoured the bookmakers — have compensated for lower volumes.
This is sustainable only up to a point. If turnover continues to fall — driven by affordability checks pushing bettors to unlicensed markets, by tax increases squeezing operator margins, or by declining engagement with the sport — the levy yield will eventually follow. A record based on higher margins rather than higher volumes is fragile. It depends on conditions that the industry cannot control: the results of horse races, regulatory policy, and consumer behaviour.
For bettors, the levy is invisible in day-to-day terms. You will never see it itemised on a bet slip. But it is worth knowing that every bet you place on British horse racing with a licensed operator contributes to a system that funds the prizes horses run for, the welfare they receive after retirement, and the integrity that ensures the sport you are watching is fair. It is one of the more elegant financial structures in sport — and one of the most quietly consequential.
For a broader understanding of the tax framework that surrounds UK horse racing betting, including the 2026 duty changes and what punters pay directly, the betting tax guide covers the full picture.
Do betting exchange bets contribute to the levy?
Yes. Since the 2017 reform, the statutory levy applies to all operators taking bets on British horse racing, including betting exchanges. Exchanges pay the levy based on their gross profits from racing markets — which in their case means the commission they earn on winning bets. The rate is the same 10 percent that applies to traditional bookmakers.
How much prize money does the levy fund each year?
The exact allocation varies annually based on the total levy yield and HBLB priorities. In the 2024-25 financial year, the record levy yield of 108.9 million pounds supported prize money across British racing, with an additional 4.4 million pounds earmarked for 2026. Prize money is the largest single category of levy expenditure, though the levy also funds horse welfare, integrity services, and veterinary research.
Prepared by the First bet Horse Racing editorial staff.
