The Horserace Betting Levy: Where Your Bet’s Tax Actually Goes
Most punters have never heard of the Horserace Betting Levy Board. I had not, until a trainer I know mentioned in passing that his prize-money cheque came partly from a tax on my own betting account. That was a strange feeling – the suspicion that every losing bet I had placed for a decade had been quietly funding the very horses I was failing to back. He was right. Roughly 10% of every bookmaker’s gross profit on British racing flows through the Levy and out the other side as prize money, integrity funding, and welfare grants. Few punters know it. Fewer still understand how the mechanism works.
A 1961 statute that still funds British racing in 2026
The Levy is the product of the Betting, Gaming and Lotteries Act 1961, passed when off-course bookmaking was legalised in Britain. The deal struck at the time was simple. If bookmakers were going to be allowed to take bets on horse races without sending punters to the track, the sport would need a guaranteed share of the resulting profits to survive. The Levy was the mechanism – a statutory contribution paid by bookmakers, collected by the Horserace Betting Levy Board (HBLB), and distributed back to racing.
That deal has survived six decades and several waves of gambling reform. The current rate is 10% of the bookmaker’s gross profit on bets struck on British horseracing. The HBLB collects, audits and distributes the money each year, with the bulk going to prize money supplements and a smaller share to veterinary research, integrity services, and racecourse infrastructure.
How the Levy is calculated
The calculation is not on turnover. It is on gross profit – the bookmaker’s win, after paying out winning bets and refunds. If a bookmaker takes £100m in bets on British racing in a year and pays out £92m, the gross profit is £8m. The Levy at 10% is £800,000 – payable to the HBLB regardless of the bookmaker’s other costs or other betting products.
The 2025-26 contribution rules cover all British-licensed bookmakers, both retail and online, whether they have their main operations in the UK or hold a remote licence from elsewhere. That last point matters. Before the 2017 reform, offshore-licensed bookmakers could legitimately avoid the Levy on British racing – they paid betting tax in their home jurisdiction but not the British Levy. The 2017 reform closed that loophole. Now any operator taking bets from British residents on British racing pays the Levy.
There are exemptions for very small operators, but they apply only at the margins. The big bookmakers – and that means every retail brand a punter has heard of – pay the Levy at the headline rate.
2024-25: £108.9m and a fourth straight rise
The Levy hit £108.9m in 2024-25, a record going back to 2017 and up from £105.3m the previous year. That is the fourth year in a row of growth, with annual totals of £97m, £100m, £105m and £108m across 2021-22 to 2024-25. The trend is unmistakable. Despite total betting turnover on British racing falling sharply over the same period, the Levy has risen because bookmaker margins have widened and the share of betting that goes through licensed operators has held up.
«For the fourth year running, levy contributions have increased to record levels, demonstrating the growing, long-term investment regulated betting provides British horseracing. But it is concerning to see once more that despite record levy contributions, racing continues to struggle, both as a sport and as a betting product, with betting turnover down again year on year,» is how Grainne Hurst, CEO of the Betting and Gaming Council, framed it. She is making the right point – record Levy and declining turnover are not contradictions. They are the visible signs of a market where bookmakers extract more value per pound staked.
The Betting and Gaming Council estimates that its members’ total contribution to British racing through Levy, media rights and sponsorship runs to £350m annually. That figure is several multiples of the Levy alone, and reflects the wider commercial relationship between bookmakers and the sport – racing’s commercial dependency on the betting industry runs far deeper than the statutory contribution suggests.
Where the £108.9m goes – prize money, integrity, welfare
The HBLB publishes its distribution priorities annually. The biggest single share goes to prize money supplements. In 2025, total prize money across British racing rose by £4.7m to £153m, and a meaningful chunk of that increase came directly from Levy supplements pushed into specific race categories – particularly the Premier Fixture cards where prize-money growth has been concentrated.
After prize money, the next priorities are integrity services – drug testing, racecourse scrutiny, the BHA’s racing department – followed by veterinary research grants, racing welfare funds, and infrastructure support for racecourses that would otherwise struggle to maintain their facilities. There is also a smaller pool reserved for the education and training of stable staff, jockeys and apprentices.
The distribution priorities can shift year-on-year. In years where the Levy is strong, the HBLB tends to push more into prize money. In years where the Levy comes in lower than expected, integrity and welfare are protected first, with prize-money supplements being cut to compensate. The £108.9m in 2024-25 enabled the £4.7m prize-money rise; a fall in the Levy would directly threaten that.
What could shrink the Levy
Three forces are pulling at the Levy from different directions. First, total betting turnover on British racing is falling. The 2025 figures showed turnover down 4.2% year-on-year over the first nine months, and 12.8% lower than the same period in 2023. If turnover keeps falling, eventually bookmaker margins cannot compensate and Levy will follow.
Second, affordability checks are pushing high-spending punters off licensed sites. The Sharp Betting Impact Assessment modelled affordability checks reducing the Levy by 24-53% and costing racing £147-321m in revenue across the first two years, with The Jockey Club estimating a potential £250m hit over five years. Those are projections, not actuals, but the direction of travel is consistent with the early data on punter behaviour.
Third, the unlicensed offshore market is growing. The Betting and Gaming Council estimates roughly £4.3bn flows through unlicensed operators annually in Britain, involving around 1.5m punters. Every pound that moves from a licensed site to an offshore operator is a pound that pays no Levy. The Cheltenham Festival 2025 alone saw an estimated £60m flow through unregulated operators – money that should have supported British racing through the Levy and did not.
The combination is what worries the racing industry. Falling turnover, behaviour-driven account closures and a thriving offshore market could shrink the Levy meaningfully even while the headline contribution rate stays at 10%.
For more on how the offshore market is undermining the statutory framework, the £4.3bn unlicensed operator problem takes the next step.
Common questions about the Levy
When is the Levy actually paid by bookmakers?
The Levy operates on an annual cycle running from 1 April to 31 March, matching the British financial year. Bookmakers report their gross profit on British racing for the year, the HBLB calculates the Levy owed at 10%, and payment is made within a set window after the audit. Some larger operators pay quarterly instalments through the year.
Do offshore-licensed operators pay the British Levy?
Since the 2017 reform, all operators taking bets from British residents on British racing must pay the Levy, regardless of where they are licensed. Operators without a British licence taking bets from British punters illegally – the offshore unlicensed market – pay nothing, which is why the offshore market is such a financial threat to British racing’s income from the Levy.
Escrito por los editores de «Bets Horse Racing».
