Horserace Betting Levy — Where Your Stake Money Goes

The Hidden Mechanism Behind Every Bet

Every pound wagered on British horse racing contributes to a funding mechanism that most punters have never heard of. The Horserace Betting Levy — collected by the Horserace Betting Levy Board (HBLB) — channels a percentage of bookmaker profits back into the sport, funding prize money, integrity services, veterinary research, and racecourse improvements. In 2024/25, the Levy yield reached £108.9 million — a record since the 2017 reforms and the fourth consecutive year of increase. The invisible tax that funds the sport you bet on — and understanding it reveals why the quality of British racing depends directly on the health of the betting market.

How the Levy Works

The Levy is calculated as 10% of bookmaker profits derived from British horse racing. Every licensed bookmaker — whether a high-street shop, an online operator, or an on-course rails bookmaker — contributes to the Levy based on their racing-specific revenue. The 10% rate was established following the 2017 reform that extended the Levy to offshore operators for the first time, closing a loophole that had allowed bookmakers based outside the UK to profit from British racing without contributing to its funding.

The history stretches back to 1961, when the Betting Levy Act established the principle that the betting industry should contribute to the sport it depends on. At the time, off-course betting had just been legalised, and legislators recognised that without a funding mechanism, the racing industry — which produces the product that bookmakers sell — would decline. The Levy has operated continuously since then, though the rate and collection method have been reformed multiple times.

Collection is managed by the HBLB, a statutory body that sits between the betting industry and the racing industry. Bookmakers report their racing profits quarterly, the HBLB calculates the Levy due, and the funds are distributed according to an annual expenditure plan. The process is transparent: the HBLB publishes its accounts, expenditure breakdowns, and allocation decisions in a publicly available annual report.

Where the Money Goes

The Levy’s allocation in 2024/25 breaks down into four primary categories. The largest, by a significant margin, is prize money: £66.9 million was distributed to racecourses to supplement prize funds. This money directly increases the purse for races across all levels, from Group 1 events to modest mid-week handicaps. Higher prize money attracts better horses, which produces better racing, which attracts more betting interest — creating a virtuous cycle that benefits everyone in the ecosystem.

The second category is integrity and regulation, which received £19.4 million. This funds the British Horseracing Authority’s integrity unit, which monitors for corruption, investigates suspicious betting patterns, and enforces the rules of racing. Drug testing, race-day stewarding, and the licensing of jockeys and trainers all fall under this budget. For punters, the integrity services funded by the Levy are what give you confidence that the race you are betting on is run fairly.

Education, horse welfare, and industry promotion received £7.9 million. This covers the retraining of racehorses after their competitive careers end, educational programmes for stable staff and jockeys, and promotional initiatives aimed at growing the sport’s audience. The Retraining of Racehorses (RoR) charity, which finds second careers for retired thoroughbreds, is a significant beneficiary of this category.

Veterinary research and science received £2.3 million — a smaller allocation but one that funds long-term improvements in horse health, track safety, and understanding of exercise-related injuries. Research funded by the Levy has contributed to improvements in racecourse surfaces, diagnostic techniques for pre-clinical injuries, and treatment protocols that have reduced fatality rates over the past two decades.

The Paradox: Rising Levy, Falling Turnover

The headline numbers contain a contradiction that reveals important truths about the current state of British racing. The Levy yield is at a record high — £108.9 million — yet average betting turnover per race has fallen by 19% over three years compared to 2021/22. More money is flowing into the Levy while less money is being bet per race. How is that possible?

The answer lies in the composition of the betting market. The decline in turnover per race is concentrated among larger-staking customers — the high-value punters who previously placed significant bets on individual races. Affordability checks, introduced and tightened as part of the UKGC’s responsible gambling measures, have restricted the betting activity of customers identified as potentially exceeding safe spending thresholds. These checks have reduced the average stake per bet among the top spending tier, which directly reduces turnover per race.

Meanwhile, the overall volume of recreational betting has remained stable or grown slightly. More people are betting smaller amounts, and the aggregate revenue — from which the Levy is calculated — has increased even as individual race turnover has fallen. The Levy captures a percentage of total bookmaker profit, so if total profit rises (through volume) while per-race turnover falls (through reduced high-value staking), the Levy can grow simultaneously with a contraction in the metric that matters most to the racecourse experience.

The long-term implications are debated within the industry. The BHA and racecourses argue that falling turnover per race is unsustainable because it signals reduced engagement from the most valuable customer segment. Bookmakers contend that a broader, more recreational customer base is healthier for the industry long-term. The Levy figures suggest both sides are partially right: the money is still flowing, but its source has shifted — and whether that shift produces a sustainable funding model for decades to come remains an open question.

Why It Matters to Punters

The Levy is not an abstract fiscal mechanism. It is the reason the race you are betting on has a prize fund large enough to attract competitive horses. It is the reason drug testing exists at the scale necessary to maintain confidence in race results. It is the reason retired racehorses receive support rather than being abandoned. Every bet you place on British racing funds, through the Levy, the infrastructure that makes the sport worth betting on.

Better prize money draws better horses to more races, which creates more competitive fields, which produces better betting markets with more each-way opportunities and deeper form data to analyse. The Levy-funded integrity services protect you from corruption that would undermine the entire basis of informed betting. And the veterinary research funded by the Levy contributes to a sport that is safer for its equine participants — a moral foundation that supports the legitimacy of racing as a betting medium.

The connection between betting volume and sport quality is direct and measurable. When the Levy collects record sums, the racing programme benefits: more fixtures with better prize money, more investment in racecourse facilities, and more resources for the welfare of the animals and people who make the sport possible. When the Levy contracts — as it did in the years before the 2017 reform, when offshore bookmakers evaded collection — prize money falls, smaller racecourses struggle, and the overall quality of the product diminishes.

The invisible tax that funds the sport you bet on works best when the betting market is healthy. Every pound wagered legally, with a UKGC-licensed operator, contributes to the Levy. Every pound wagered on the black market — with unlicensed operators who pay nothing — weakens the system. For punters who care about the quality and integrity of the sport they follow, betting with licensed operators is not just a regulatory compliance matter. It is a contribution to the future of British racing.