How the Betting Levy Funds UK Horse Racing

Every ante-post bet you place with a UK-licensed bookmaker contributes, indirectly, to the survival of British horse racing. The mechanism is the Horserace Betting Levy — a statutory charge on bookmakers’ gross profit from racing that funds prize money, regulation, integrity services, and veterinary research. In 2024-25, that Levy reached a record £108.9 million. Yet the paradox is sharp: the Levy is rising while the betting turnover that underpins it is falling. Understanding how the Levy works — and where your money goes — adds a dimension to ante-post betting that most guides ignore entirely.

What Is the Betting Levy?

The Horserace Betting Levy Board was established by the Betting Levy Act 1961 — the same legislation that legalised off-course betting shops in Britain. Its purpose was, and remains, to ensure that the betting industry contributes financially to the sport it depends on. The Levy is calculated as a percentage of each bookmaker’s gross profit from British horse racing. Since 2017 reforms, the rate has been set at 10% of gross profit, and the scope was extended to cover overseas-based operators serving UK customers.

The HBLB collects the Levy and distributes it according to its published business plan. It is not funded by central government and receives no National Lottery money. Its income comes entirely from the bookmakers — which means, in practice, it comes from the bettors whose stakes generate the gross profit on which the Levy is calculated.

For context: the Levy is distinct from the Gambling Commission’s regulatory fees, from the new Statutory Levy on gambling harms (introduced in 2025), and from the media rights payments that racecourses charge bookmakers for broadcasting pictures. These are separate revenue streams that collectively fund different aspects of the racing and regulatory ecosystem. The HBLB Levy is specifically directed at the improvement of the sport itself.

Record: £109M in 2024/25

The trajectory of Levy income over the past five years tells the story of a market in transition. In 2020-21, during the COVID disruption, the Levy yielded £82 million. Recovery followed: £98 million in 2021-22, £100 million in 2022-23, £105 million in 2023-24, and £108.9 million in 2024-25 — the highest figure since the 2017 reforms brought offshore operators into scope.

The HBLB initially expected the 2024-25 yield to be lower — around £100 million — based on the downward trajectory of betting turnover. What pushed the figure above expectations was bookmakers’ gross profit in February and March 2025, which exceeded projections. The Cheltenham Festival results were specifically cited as a material factor: when favourites lose, bookmakers retain a larger share of stakes, and the gross profit — and therefore the Levy — rises.

Alan Delmonte, HBLB Chief Executive, described the broader environment: “The assumptions will be reviewed regularly through the year in the light of our own analysis based on the greatly appreciated information provided to us voluntarily by major bookmakers.” The language is diplomatic, but the implication is clear: Levy projections are uncertain because the underlying market is volatile, and the HBLB depends on bookmaker cooperation for the data it needs to plan.

Where It Goes: Prizes, Integrity, Research

In 2024-25, the HBLB allocated its income across several categories. The largest share — £66.9 million — went to prize money. This direct contribution to the purses on offer at British racecourses is one of the reasons that total prize money reached a record £194.7 million in 2025. Without the Levy contribution, prize money would need to come entirely from racecourses and owners, and it would be substantially lower.

Regulation and integrity services received £19.4 million. This funds the BHA’s integrity unit, which monitors betting patterns for suspicious activity, investigates potential rule breaches, and works with the Gambling Commission and law enforcement to detect race-fixing and insider trading on betting markets. The integrity of the ante-post market depends directly on this work — without it, the risk of backing a horse whose race has been predetermined would increase.

Veterinary research received £2.3 million, supplemented by a £200,000 grant from the Racing Foundation. This funds equine health programmes, infectious disease research, and welfare initiatives including racehorse retraining and rehabilitation. A further £7.9 million went to staff recruitment, training, and national promotion campaigns including the “Going Is Good” initiative that contributed to the attendance increase in 2025.

Rising Levy, Falling Turnover

The central paradox of the current market is that the Levy is at a record high while betting turnover is in sustained decline. Total turnover on racing fell 4.3% in 2025, following a 6.8% drop in 2024. Cumulatively, more than 10% has been wiped from the turnover base since 2023. Average turnover per race has fallen even more sharply — down 8% year-on-year on the HBLB’s measure.

The Levy has continued to rise because it is calculated on gross profit, not turnover. When turnover falls but results favour the bookmakers — meaning more punters lose than the statistical average — gross profit can increase even as the total amount staked decreases. This is not a sustainable dynamic. A long-term decline in turnover will eventually compress gross profit too, and the Levy will follow.

The HBLB’s own interim chair, Anne Lambert, acknowledged the tension directly. While describing the organisation’s cash position as “healthy,” she noted that the continued fall in turnover “may have an impact on longer-term spending.” The message was clear: today’s record is tomorrow’s baseline, and the baseline is built on foundations that are visibly eroding.

The HBLB is aware of the risk. For 2025-26, it has assumed a starting Levy yield of £103 million — a significant reduction from the 2024-25 outturn. If turnover continues to fall and results revert to normal, the actual yield could be lower still. The sport’s leadership is planning for that contingency, but the margin for error is narrowing.

Future Challenges

The Levy faces three structural headwinds. First, the ongoing decline in turnover driven by affordability checks, competition from other betting products, and the growth of the black market. Every pound that migrates to an unlicensed operator is a pound that generates zero Levy. Second, the Treasury’s tax consultation, which proposes replacing the current three online betting and gaming tax rates with a single rate. If the unified rate increases the tax burden on operators, it could reduce gross profit and, by extension, the Levy yield. Third, the declining horse population — fewer horses means fewer races, fewer races means fewer betting opportunities, and fewer betting opportunities means less turnover to generate profit.

In response, the HBLB has increased its grant expenditure for 2026: an additional £4.4 million for prize money and £1.2 million for regulatory incentives. The investment is a statement of intent — backing the sport through a difficult period — but it is funded from reserves and current income, both of which are finite. If the Levy yield falls back to £100 million or below, the Board will face hard choices about which areas to cut.

For the ante-post bettor, these challenges are not abstract. The Levy funds the prize money that attracts good horses to the races you bet on. It funds the integrity services that ensure those races are run fairly. And it funds the promotional campaigns that bring new racegoers — and eventually new bettors — into the sport. When you bet with a licensed operator, you are investing in this ecosystem. When you bet elsewhere, you are not. That distinction, quiet as it is, matters.