The Horserace Betting Levy: Where Your Stake Actually Goes

The tax you pay every time you bet that you never see

Every bet you place on British horse racing feeds a statutory mechanism that most punters have never heard of. The Horserace Betting Levy collected £108.9 million in the year to March 2025, the highest yield since 2017. That money funds prize money, integrity services and breed improvement across British racing, and it flows directly from bookmakers’ gross profits on racing bets into the sport’s financial ecosystem. If you have ever wondered why British racing has the prize structure it does, the Levy is most of the answer.

The Levy is not a tax you pay visibly. You will never see it on a betting slip. It is charged on bookmakers’ gross profits, not on individual stakes, and the bookmakers factor it into their pricing. But the money that funds Cheltenham’s Gold Cup prize pot and Royal Ascot’s winner’s cheque traces back through the Levy from the pound you staked on a Wednesday afternoon at Wolverhampton.

Levy legal basis

The Levy exists under the Betting, Gaming and Lotteries Act 1963 as amended, administered by the Horserace Betting Levy Board (HBLB), a statutory public body answerable to ministers. The legal structure gives the Levy a specific job: to collect funds from bookmakers and distribute them for “the improvement of horse racing, the improvement of breeds of horses and the advancement or encouragement of veterinary science or veterinary education.”

That statutory framing matters because it defines what the Levy can and cannot fund. Prize money, integrity services (drug testing, stewards), racecourse improvements, veterinary research – all eligible. Direct subsidies to racecourses or to specific trainers are not. The HBLB’s annual budget allocations are structured around these categories.

Political pressure to reform the Levy has been constant. The current 10% rate on bookmakers’ gross profits above £500,000 annual threshold was set in 2017 after the extension of the Levy to offshore operators. Reviews of the rate have been running for years, and the sport has pushed for increases while bookmakers have resisted. In March 2026 the latest review concluded with no change to the rate – a result the British Horseracing Authority called disappointing.

Who pays and at what rate

The Levy is paid by every bookmaker licensed to offer betting on British horse racing whose annual gross profits from that activity exceed £500,000. The rate is 10% on those gross profits. Below £500,000, operators are exempt. The threshold structure means only established commercial operators contribute; small specialised bookmakers fall outside the scheme.

“Gross profits” in Levy accounting means bookmakers’ takings minus winnings paid out – essentially their margin on the volume of racing bets they accept. A bookmaker with £100 million of gross profits from British horse racing bets pays £9.95 million in Levy (10% of £99.5 million, allowing for the £500,000 exemption).

Since 2017 the Levy has applied to offshore-licensed operators offering bets on British racing to UK customers, closing a loophole that had cost the sport millions in the early 2010s. The offshore extension produced an immediate step-change in yield: from around £70 million pre-extension to the £80-£110 million range since. The 2024-25 figure of £108.9 million represents the upper end of that range, reflecting strong bookmaker profits from the Cheltenham Festival that year.

Where the money goes

The HBLB allocates its annual income through a committee structure reviewed against the statutory purposes. In 2024-25, the Levy Board budget for prize money was £66.9 million, with an additional £4.4 million planned for 2026.

Alongside prize money, the HBLB made grant awards of £19.4 million to racing regulatory services and £7.9 million to professional training through 2025. Veterinary research, racecourse improvements and specific integrity-related projects receive smaller but significant allocations. The 2024-25 year-end reserves stood at £58.7 million, above the HBLB’s preferred operating range, reflecting the strong yield year.

The practical impact on British racing’s economics is substantial. Prize money across the sport totalled £153 million in 2025, up from £148.3 million in 2024. Flat prize money rose by £3 million, Jump prize money by £1.7 million. The HBLB’s contribution to that total – around £67 million – is just under half of all prize money paid across the British fixture list, with racecourses and owners/sponsors providing the balance. Without the Levy, British racing’s prize structure would look radically different.

Yield history and volatility

The £108.9 million yield in 2024-25 is the highest since 2017, but yield volatility is baked into the Levy’s mechanism. Because it is charged on bookmaker gross profits rather than turnover, it rises when bookmakers have bad years for punters (their margins expand) and falls when punters do well (margins compress).

Alan Delmonte, Chief Executive of the HBLB, commented in the 2024-25 annual report that “the last two months, February and March 2025, saw bookmakers’ gross profits well above recent norms, with March’s outturn reflecting particularly bookmaker-friendly results at the Cheltenham Festival. This is not the first time in recent years that Cheltenham has had a significant impact on yield, a reflection of the essential unpredictability of the sport.”

The underlying turnover trend tells a different story. Betting turnover per race in 2024-25 fell 8% year on year, 15% versus 2022-23 and 19% versus 2021-22. In the first quarter of the 2025-26 financial year, total turnover fell 9% year on year and average turnover per Core Fixture fell 14.4%. The yield held up only because bookmaker margins expanded; the underlying pool of money circulating through racing betting is shrinking.

The HBLB’s 2024-25 year-end reserves of £58.7 million reflect that uncertainty. The Board has signalled that its preferred reserves range is below the current level, but the volatility in yield makes drawing down reserves risky without knowing how the next year will shape up.

Why punters should care

The Levy is the direct financial mechanism linking betting volume to prize money. Every pound of gross profit a bookmaker earns on British racing generates 10p of Levy contribution, which in turn funds the prize pot the horses you are betting on are racing for. A sport with inadequate prize money cannot hold top horses in training, cannot attract quality racing, and cannot produce the fields punters want to bet on.

The commercial stakes are clear to the BHA, whose Chief Executive Brant Dunshea framed the 2026 Levy review outcome bluntly: “It is disappointing that it has taken almost three years to determine there should be no change in the Levy rate. Throughout protracted negotiations British horseracing engaged with the Government in good faith, including providing clear evidence of a substantial – and growing – gap between our costs of providing the sport and the return we receive from betting.” The gap Dunshea refers to is the difference between racing’s operating costs and its Levy income, which has been widening as turnover has contracted and costs have risen.

The structural risk for punters is that a sustained Levy shortfall leads to prize-money cuts, fewer fixtures, fewer horses in training and fewer runners per race. All of those outcomes degrade the product punters are betting into. Dunshea has argued repeatedly that “adding more red tape to an already highly regulated sector will only fuel a significant rise in illegal betting, deprive horseracing of funding and prevent the Government collecting millions of pounds in much-needed taxation.” The feedback loop between betting regulation, Levy yield and racing’s viability is the unstated backdrop to every wager placed today. The pillar on betting at horse racing sets out the wider context of how these policy dynamics feed into the current pricing environment.

Written by the editors at bettingathorseracing.com.