The Horserace Betting Levy Explained: How Your Bets Fund Racing
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Every pound you bet on horse racing in the UK funds the sport you are watching. Not metaphorically – literally. A percentage of every bookmaker’s profit on horse racing bets is collected by the Horserace Betting Levy Board and distributed back into the industry as prize money, integrity funding, veterinary science grants, and breeding incentives. I have been tracking levy data for most of my career, and the system fascinates me because it is one of the only examples in sport where the betting industry directly finances the competition it profits from. Understanding the levy is not just academic – it explains why racing exists in its current form, why certain races carry the prize money they do, and why the entire industry panics when betting turnover falls.
How the Levy Is Calculated and Collected
The Horserace Betting Levy is charged at 10% of a bookmaker’s gross profits on horse racing bets, applied to operators whose racing profits exceed 500,000 pounds in a levy period. The levy applies to all licensed operators serving UK customers, including those based overseas – a critical extension that was introduced in 2017 and significantly broadened the levy’s revenue base.
The calculation is specific to horse racing. An operator’s profits from football, tennis, or casino gaming are not subject to the levy. Only the portion of gross gambling yield (GGY) derived from bets placed on horse racing is levied, which means the racing levy is a targeted contribution rather than a general gambling tax. This distinction matters because it ties the sport’s funding directly to its own betting market – when racing betting grows, levy income grows; when it shrinks, so does the funding.
The levy is collected by the Horserace Betting Levy Board (HBLB), which administers the funds and determines how they are allocated. The HBLB’s board includes representatives from the betting industry, the racing industry, and independent members. The allocation decisions – how much goes to prize money, how much to integrity services, how much to veterinary research – are made annually based on the Board’s assessment of the sport’s needs and the available revenue.
For the individual punter, the levy is invisible in the sense that it is not deducted from your winnings or added to your stake. It comes out of the bookmaker’s margin, which means it is already factored into the odds you are offered. In that sense, you contribute to the levy indirectly through the prices you accept. Whether you think of this as a cost or a contribution depends on your perspective, but the practical effect is the same: your betting activity funds the sport.
Where the Levy Money Goes: Prize Funds, Welfare and Integrity
The HBLB’s largest expenditure is prize money. For 2025, the Board committed 72.7 million pounds to prize funds, an increase from 70.5 million in 2024. This money flows directly into the races you bet on, supplementing the contributions from racecourses, owners, and sponsors. Without the levy, prize money at everyday fixtures would fall dramatically, making it uneconomical for owners and trainers to keep horses in training. The knock-on effect would be fewer runners, smaller fields, and a weaker betting product.
Beyond prize money, levy income funds several other critical functions. The levy supports the sport’s integrity services – the systems that detect and investigate suspicious betting patterns, enforce doping controls, and maintain the credibility of results. It funds veterinary science research, including work on equine health, welfare, and injury prevention. And it contributes to breeding incentives that maintain the quality of the British thoroughbred population.
Total HBLB grants, encompassing prize money, regulation, integrity, and all other allocations, are expected to reach approximately 105 million pounds in 2025. The levy yield for 2024/25 hit a record of approximately 108 million pounds, surpassing the previous record of 105 million set in 2023/24. These record figures reflect the broadened levy base following the 2017 extension to overseas operators rather than growth in the underlying betting market – an important distinction that the headline numbers can obscure.
Levy Yield Trends: Record Revenue Despite Falling Turnover
Here is the paradox at the heart of the levy’s current position: levy income has reached record levels at exactly the same time that betting turnover on horse racing is declining sharply. Turnover in 2024/25 ran 15% below 2022/23 levels and 19% below 2021/22. Yet the levy yield continues to climb.
The explanation lies in the difference between turnover and yield. Turnover measures total money wagered; yield measures bookmaker profit. Even as total betting volume falls, bookmakers can maintain or increase their yield by widening margins, adjusting market pricing, and shifting their product mix toward higher-margin bet types. The levy, charged on yield rather than turnover, benefits from this dynamic in the short term.
The HBLB projects a levy yield of 103 million pounds for 2025/26 – slightly below the 2024/25 record but still historically strong. Alan Delmonte, the HBLB’s CEO, has based this forecast on agreed payments from bookmakers rather than speculative modelling, which gives the figure a degree of reliability. However, the trajectory of declining turnover raises legitimate questions about long-term sustainability. If fewer people bet on racing and total market volume continues to contract, there is a limit to how long yield-based revenue can remain elevated against a shrinking turnover base.
Grainne Hurst, CEO of the Betting and Gaming Council, has highlighted that levy contributions have increased to record levels for the fourth consecutive year, framing this as evidence of the growing, long-term investment that regulated betting provides to British horse racing. The industry’s preferred narrative is that the current system works – it is generating more revenue than ever, and the betting sector is fulfilling its obligations. The racing industry’s counter-narrative is that the turnover decline is a structural threat that record levy receipts are temporarily masking.
How the 2017 Extension to Overseas Operators Changed the Levy
Before 2017, the levy applied only to bookmakers physically located in the UK. As the industry shifted online and operators moved their headquarters to jurisdictions like Gibraltar, Malta, and the Isle of Man, an increasing proportion of horse racing profits escaped the levy entirely. By the mid-2010s, the gap between what should have been levied and what was actually collected had become a significant concern for the racing industry.
The Horserace Betting Levy (Amendment) Act 2017 closed this loophole by extending the levy to all operators serving the UK market, regardless of where they are based. Any operator that holds a UKGC remote gambling licence and generates profits from horse racing bets placed by UK customers is now subject to the 10% levy above the 500,000-pound threshold.
The impact was immediate and substantial. Levy income jumped from around 50 million pounds in the years before the extension to the 100-million-plus levels seen today. The overseas extension roughly doubled the levy’s revenue base by capturing profits that had previously flowed out of the UK without contributing to the sport that generated them.
This legislative change is one of the reasons the UK racing industry has remained financially viable despite declining domestic betting volumes. Without the overseas extension, the levy income available today would be roughly half its current level, and the consequences for prize money, integrity services, and the broader ecosystem would be severe. It is, by any measure, one of the most consequential pieces of racing-related legislation in the past two decades, and it provides a model for how regulatory frameworks can adapt to a globalised betting industry.
For context on how the levy interacts with the broader tax regime affecting bookmakers’ racing products, the main guide covers the regulatory landscape in its section on licensing, tax, and regulation.
Do offshore bookmakers pay the Horserace Betting Levy?
Yes, since the 2017 amendment. Any operator that holds a UKGC remote gambling licence and generates profits above 500,000 pounds from horse racing bets placed by UK customers must pay the 10% levy, regardless of where the operator is physically based. This extension roughly doubled the levy’s revenue by capturing profits from operators headquartered in Gibraltar, Malta, the Isle of Man, and other overseas jurisdictions.
How does the levy affect betting odds for punters?
The levy is charged on bookmaker profits, not on individual bets, so it is not directly deducted from your stake or winnings. However, it is a cost that bookmakers factor into their pricing. Racing markets carry the levy cost on top of gambling duty, which gives horse racing a higher total cost base than other sports. This can translate to slightly wider margins on racing odds compared with football or tennis, though the effect varies by operator and market.
Published by the Horse Racing bet Website team.
