Every time you place a bet on a British horse race, a portion of the bookmaker’s profit is collected and reinvested into the sport that generated it. That mechanism is the Horserace Betting Levy, administered by the Horserace Betting Levy Board, and in 2024-25 it collected a record £109 million — the fourth consecutive year of growth. It is the single most important funding pipeline in British racing, connecting the money you wager to the prize funds, veterinary science, racecourse upkeep, and breeding programmes that keep the sport running.
Most punters have a vague awareness that the levy exists but little understanding of how it works, how much is collected, or where the money ends up. That gap matters because changes to the levy — whether through regulatory reform, tax increases, or shifts in betting behaviour — directly affect the quality of the racing product you bet on. Fewer levy pounds means smaller fields, lower prize money, and ultimately a worse betting product.
Levy Calculations: Tracking Bookmaker Contributions to the Sport
The levy is charged as a percentage of a bookmaker’s gross profits on British horse racing. The current rate, set by statutory instrument, is 10% of gross profits — meaning if a bookmaker takes £10 million in stakes on British racing and pays out £9 million in winnings, it owes 10% of the £1 million difference, or £100,000, to the Levy Board. The calculation is applied across the bookmaker’s entire British horse racing book, not race by race.
Since 2017, the levy has applied to all bookmakers offering bets on British racing to UK customers, including offshore operators. Before that change, only domestically licensed bookmakers paid the levy, which created an obvious loophole: operators could base themselves in Gibraltar or the Isle of Man and avoid contributing to the sport they profited from. Closing that gap was one of the most significant structural reforms in racing finance, and it is a major reason collections have risen to record levels.
The HBLB has allocated £77.1 million for 2026, including an additional £4.4 million directed specifically at prize money. That allocation is built on projections of operator profitability which are themselves built on assumptions about betting volumes and tax rates. If the Remote Gaming Duty increase to 40% compresses bookmaker margins, the levy base shrinks — you cannot take 10% of a profit that no longer exists. This is the structural vulnerability that makes levy funding inherently cyclical and politically sensitive.
Collection is handled directly by the Levy Board, which has the legal authority to audit operator accounts and enforce payment. Non-compliance is rare among major operators, but the Board publishes its collection data annually, providing transparency on which sectors of the betting market contribute what. Online betting now accounts for the overwhelming majority of levy income, reflecting the broader migration from shop to screen.
Where Levy Money Goes: Prize Funds, Welfare and Breeding
The levy funds three broad categories: prize money, horse welfare and veterinary science, and improvement of breeds. Prize money receives the largest share and has the most visible impact. In 2025, total British prize money reached a record £194.7 million, with racecourse contributions accounting for £103.4 million — 53% of the total — and the HBLB contributing £63.2 million, up 4.6% on the previous year. Owner contributions make up the remaining £26.8 million.
The levy’s prize money contribution is distributed across all levels of racing, from Group 1 classics worth hundreds of thousands to Monday afternoon handicaps at Catterick worth a few thousand. The allocation formula aims to ensure that even lower-tier racing offers enough prize money to cover owners’ basic costs, which is critical for maintaining field sizes and competitive racing. Without the levy subsidy at the bottom end, many owners would stop running horses in Class 5 and 6 races, and the fixture list would hollow out.
Veterinary science and horse welfare receive the second-largest allocation. The Levy Board funds equine research programmes through the Animal Health Trust and other institutions, covering everything from fracture prevention to respiratory disease. It also funds the development of racecourse safety standards, including track surfaces, medical facilities, and the equine ambulance service. These investments are invisible to most bettors but directly affect the quality and safety of the racing you watch.
Breeding improvement, the third pillar, supports schemes that incentivise British-based breeding rather than importing horses from Ireland or France. The prize money structure interacts with breeding incentives: higher prize money at British tracks encourages owners to buy British-bred stock, which supports domestic studs and the rural economy around them.
Why the Levy Is Under Pressure Despite Record Collections
A record £109 million sounds healthy, and in absolute terms it is. But the figure masks structural pressures that the Levy Board itself has acknowledged. Overall betting turnover on British horse racing has declined by 10.3% since 2023, a cumulative drop driven by affordability checks, increased regulatory friction, and competition from other betting products. If gross profits follow turnover down, the levy will contract even if the rate remains at 10%.
The second pressure point is the RGD increase. Bookmakers facing a near-doubling of their remote gaming tax will look to protect margins wherever possible, and horse racing — already a low-margin product compared to slots and casino — is vulnerable to being deprioritised. If operators invest less in marketing racing, offer thinner odds, and reduce promotional spending, turnover on racing falls further, and the levy base with it.
There is also the question of whether 10% is the right rate. Racing’s governing bodies have periodically argued for an increase, pointing out that French racing benefits from a much higher percentage of betting turnover being reinvested in the sport. Operators counter that any rate increase on top of the RGD rise would make British racing betting commercially unviable at current margins. The debate is circular and politically charged, but the underlying numbers are straightforward: British racing needs approximately £180-200 million annually in combined prize money and infrastructure spending to maintain its current quality, and the levy alone cannot cover that without complementary income from racecourses and owners.
For punters, the practical implication is that the health of the levy system directly affects the betting product. More levy money means better prize money, which attracts better horses, which produces more competitive fields, which creates more genuine betting opportunities. The reverse is also true. Following levy developments is not just industry politics — it is a leading indicator of whether the racing you bet on next year will be better or worse than the racing you bet on today.
