The Horserace Betting Levy — How Results Fund British Racing

Every time a bet is placed on a horse race in Britain, a fraction of the bookmaker’s profit flows back into the sport. That fraction — the horse racing betting levy — is not voluntary. It is a statutory obligation, enshrined in law since the 1960s and reformed most recently in 2017 to capture online betting operators based overseas. The levy funds prize money, regulation, welfare and veterinary science. Without it, British racing as it exists today would collapse within a fiscal year. With it, the sport sustains a structure that produces over 10,000 races annually — each one generating a result that feeds back into the same betting market from which the levy is drawn.

The HBLB Annual Report for 2026/25 confirmed a record levy yield of £108.9 million, up from £105.3 million the previous year. That this record was achieved during a third consecutive year of material decline in betting turnover is one of the most counterintuitive data points in British sport.

How the Levy Works

The Horserace Betting Levy is set at a flat rate of 10% of the gross gambling yield generated by bookmakers from bets on British horse racing. Gross gambling yield — GGY — is the amount retained by the bookmaker after paying out winnings. It is not the same as turnover. Turnover is the total amount staked; GGY is the profit margin. A bookmaker that takes £1 million in bets and pays out £900,000 in winnings has a GGY of £100,000, and owes the Levy Board £10,000.

The 2017 reforms extended the levy’s scope to include bets placed online with operators based outside the UK, provided the bettor is located in Great Britain. Before 2017, offshore bookmakers accepting British customers paid no levy, creating a substantial funding gap. The reform closed that gap and immediately increased levy income. The yield rose steadily from £83 million in 2017/18 to £100 million in 2022/23, and then to the current record of £108.9 million.

The levy is collected by the Horserace Betting Levy Board, a non-departmental public body sponsored by the Department for Culture, Media and Sport. Only bookmakers with annual gross profits on British horse racing exceeding £500,000 are liable. In practice, this captures all the major licensed operators and most of the significant mid-tier firms. Smaller operators fall below the threshold.

Where Levy Money Goes

The HBLB distributes approximately 60% of its income to prize money, making it the single largest funder of the sport’s reward structure. In 2026, the Board contributed £72.7 million to prize money, up from £70.5 million the previous year. For 2026, an additional £4.4 million has been allocated. This prize money is channelled through the ratecard system, which rewards racecourses that match or exceed the Levy Board’s contributions with their own funding.

Regulation and integrity services receive the second-largest allocation. This covers the cost of stewarding, drug testing, licensing and the BHA’s regulatory functions — the infrastructure that ensures race results are fair and enforceable. Without this funding, there would be no mechanism to investigate interference, no drug testing programme, and no stewards to call enquiries. The integrity of every result published in Britain depends, ultimately, on levy-funded regulation.

Horse welfare absorbs a further share. The HBLB funds veterinary science research, equine disease surveillance, and welfare initiatives including aftercare programmes for retired racehorses. In 2026, the Board invested £2.3 million in disease surveillance and veterinary science alone. Non-fixture related grants — covering recruitment, training, education and the Horse Welfare Board — accounted for an additional £7–8 million annually in recent years.

The Levy Paradox: Rising Yield, Falling Turnover

The record levy yield of £108.9 million sits alongside a betting market in visible contraction. Total turnover on British horse racing fell by 16.3% between 2021/22 and 2023/24, from £10 billion to £8.73 billion. Adjusted for inflation, the real decline was closer to 26%. The average turnover per race in 2026/25 was 8% lower than the year before, 15% below 2022/23, and 19% below 2021/22.

How can the levy rise while turnover falls? The answer lies in bookmaker margins. The levy is calculated on GGY, not turnover. If bookmakers retain a larger share of each pound staked — through reduced concessions, tighter odds, and the withdrawal of promotions like universal Best Odds Guaranteed — their GGY can increase even as the total amount staked declines. That is precisely what has happened. Bookmakers have become more profitable per bet, even as the volume of bets has shrunk.

Anne Lambert, Interim Chair of the HBLB, acknowledged this tension directly. In her statement accompanying the 2026/25 Annual Report, she noted that the Board would “exercise appropriate prudence in expenditure decisions and maintain sufficient reserves as bookmakers’ increased profits are being generated from falling turnover.” The implication is clear: the current levy trajectory may not be sustainable if turnover continues to decline. Higher margins compensate for lower volume only up to a point. If the customer base erodes further — driven by affordability checks, offshore migration, or simple loss of interest — the margin gains will eventually be overwhelmed.

Future of Levy Funding

The HBLB’s starting assumption for levy yield in the year beginning April 2026 was £103 million — a deliberate step down from the £108.9 million actually achieved in 2026/25, reflecting the Board’s expectation that the favourable margin conditions of the previous year may not repeat. The Board reviews this assumption quarterly, adjusting in light of actual data provided voluntarily by major bookmakers.

Longer-term, the levy’s future is intertwined with the broader gambling policy landscape. The Treasury’s 2026 consultation on replacing the three online betting and gaming tax rates with a single rate raised alarm across the racing industry. An increase in remote betting duty from 15% to 21% — the rate applied to online casinos — would, according to BHA estimates, cost the sport £66 million per year and put 3,000 jobs at risk. The Betting and Gaming Council warned that higher taxes would squeeze bookmaker margins, reduce GGY, and therefore reduce the levy yield that racing depends upon.

The levy remains the lifeline. It converts betting activity into racing infrastructure, and racing infrastructure produces the results that generate the betting activity. The loop is self-sustaining as long as the variables hold. When they shift — and the turnover data suggests they are shifting — the system requires either reform, additional revenue streams, or a smaller sport. The results you check today exist because someone placed a bet yesterday and a fraction of the bookmaker’s profit found its way back to the racecourse. That is the levy in a sentence.