Horserace Betting Levy Structure: Bookmaker Tax and Yield Distribution
Sit through any conversation about British racing’s funding model and within five minutes you will hear the word “Levy” used as if everyone in the room understands what it is. Most do not. The Horserace Betting Levy is a 60-year-old statutory mechanism that takes a defined percentage of UK bookmaker profit on horse racing and recycles it back into the sport – prize money, integrity, the staff of the racing administration, and a small share of the wider economy that sits on top of British racing’s 59 racecourses. It is the closest thing British racing has to a public-utility model, and it is the single largest structural source of funding to the sport outside the racecourse gate.
The 2024/25 Levy yield was £108.9m – a meaningful number for a sport whose total annual prize money runs around £150m and whose wider economic value to the UK economy has been measured at £4.1bn. The 10% headline figure on bookmaker profit, the 2017 reform that extended the Levy to offshore operators, the 2024/25 redistribution between prize money and integrity, and the wider macro pressures on the bookmaker handle – these are the pieces that make sense of how the Levy actually works. This article walks them in turn.
What the Levy Is and Why It Exists
The Levy was introduced by the Betting Levy Act 1961 alongside the legalisation of off-course betting, and the underlying logic was simple. Off-course betting on horse racing was about to become a major commercial industry in Britain, and the racing industry that produced the underlying product needed a structural way to share in the revenue generated by the betting on its races. The Levy was the answer – a statutory percentage taken from licensed bookmakers’ profit on British horse racing, administered by a statutory body, and redistributed back to the sport on a formula approved by Ministers. The model has changed in detail over the intervening six decades but the core principle has not.
The European Commission’s State Aid clearance documentation for the 2017 Levy reform set out the underlying logic in a sentence that has stuck – in the UK, racing and betting have a unique interdependency that goes back over 200 years, and a day at the races includes, for most participants, betting on horse races as well. That observation, drawn from the State Aid file that approved the modern Levy structure, is the European-law endorsement of what British racing has always known: the two industries are mutually dependent and the Levy is the formal mechanism by which the dependency is monetised on a regular cycle.
The Levy is administered by the Horserace Betting Levy Board (HBLB), a non-departmental public body that collects the statutory contributions from licensed bookmakers and redistributes the proceeds to the sport. The HBLB’s board is independently appointed, its accounts are public, and the redistribution decisions are made annually on the basis of a published budget. The Board’s remit is to support the breeding, training and racing of horses in Great Britain, and the practical interpretation of that remit has expanded over the years to include integrity, equine welfare, racecourse-level grants, and a sustained programme of grants to grassroots fixtures.
The 2017 Reform and the Offshore Operators
The Levy’s most consequential modernisation was the 2017 reform that extended its reach to bookmakers operating from offshore. Before 2017, the Levy applied only to bookmakers licensed in Great Britain – a definition that had been steadily eroded by the growth of online betting from offshore jurisdictions. The leading remote operators had migrated their UK-facing operations to lower-tax jurisdictions through the 2000s, and the Levy yield had declined progressively as a result. By 2014, the share of UK-facing betting handle that fell outside the Levy net had grown to a level that threatened the sustainability of the funding model.
The 2017 reform extended the Levy to all operators offering bets to UK consumers, regardless of where the operator was licensed. The reform was negotiated through HMG, the European Commission’s State Aid framework, and the British and offshore operators themselves. The State Aid clearance – granted in 2017 – confirmed that the extended Levy was compatible with EU competition law on the basis of the racing-betting interdependency described in the same documentation. The reform was implemented with effect from April 2017 and the Levy yield recovered immediately, lifting from the sub-£60m range of the mid-2010s back into the £80m-£100m range that the modern Levy has settled into.
The 2017 reform also changed the Levy’s calculation basis. Before the reform, the Levy was calculated on a turnover basis with various adjustments. After the reform, the Levy is calculated as 10% of bookmakers’ gross profit on bets accepted from UK consumers on British horse racing, after the deduction of bookmakers’ allowable expenses. The shift to a profit-based calculation has aligned the Levy with the broader UK tax framework for betting (General Betting Duty is also calculated on a gross profit basis) and has reduced the operational friction between the operators and the HBLB collection process.
The 2024/25 Yield and Where the Money Goes
The 2024/25 Levy yield came in at £108.9m, the third consecutive year above £100m and a meaningful uplift on the pre-2017 trajectory. The yield is the single largest annual industry-funding contribution outside the racecourse gate and it shapes the British racing administration’s annual budget. The redistribution structure for 2024/25 directed £66.9m to prize money, £19.4m to integrity-related services, and £7.9m to direct staff and administrative costs, with the balance allocated to capital, equine welfare and grants programmes. The figures are the practical answer to the question of where the Levy actually goes.
The prize money allocation is the most visible part of the Levy’s output and the figure that British racing’s stakeholders track most closely. The £66.9m direct allocation underpins the HBLB-funded prize money tier at the British meetings, with additional contributions from racecourses, sponsors and the broader media-rights structure layering on top. The HBLB has confirmed an incremental £4.4m commitment for the 2026 prize money pot, taking the Board’s direct annual prize-money support above the £70m level for the first time in real terms. The increment is modest but it is the visible expression of the Board’s reading of the wider funding pressures on the sport.
The integrity allocation funds the BHA’s integrity operation – testing, regulatory enforcement, the on-course officials’ framework, and the wider regulatory infrastructure that British racing depends on for its credibility. The £19.4m figure is the largest single source of funding for the BHA’s integrity work and it is the practical mechanism by which the Levy translates into the regulatory standard that British racing maintains. The staff allocation of £7.9m funds a portion of the operational headcount in racing administration, complementing the funding from the racecourses’ own operations and the wider industry contribution.
The wider context for the 2024/25 yield is that the underlying bookmaker turnover has been falling – overall sector turnover was down 8% year on year in the most recent figures – but bookmaker gross profit has held up better than turnover, with the Levy yield therefore proving more resilient than a pure turnover-based contribution would have been. The Board’s communications through 2025 have flagged the underlying tension between rising profits and falling turnover, and have emphasised the importance of maintaining reserves against the possibility that the trend reverses in the medium term.
How the Levy Sits Alongside General Betting Duty
The Levy is one of two principal contributions that licensed bookmakers make on their UK horse racing business; the other is General Betting Duty, paid to HMRC. The Levy is 10% of gross profit, paid to the HBLB and redistributed within the sport. General Betting Duty is 15% of gross profit, paid to HMRC and merged into the general government revenue pool. Together the two contributions sum to 25% of gross profit on UK horse racing – a single number that is sometimes cited as the effective tax wedge on the sport and that becomes the comparison point against the wider remote gaming framework. The two contributions are operationally separate but they are commercially related, because they together define the bookmaker’s net margin after statutory deductions on British racing business. The architecture of the tax framework, including the General Betting Duty rate and the Remote Gaming Duty changes that are now in train, is set out in how UK betting duty and tax architecture works on British racing.
