The Horserace Betting Levy and the Each-Way Bettor

A trainer I have known for twenty years asked me at a Newbury raceday why the prize money on a Saturday handicap had gone up while his entry fees had stayed flat. The honest answer required walking through the architecture of the Horserace Betting Levy — and the conversation went on for two pints. The Levy is one of those institutional structures that almost no betting customer thinks about directly, but it sits underneath every UK racing bet and substantially funds the racing the customer is betting on. The Levy Board’s Alan Delmonte captured one corner of the 2025 picture when he noted: “the last two months, February and March 2025, saw bookmakers’ gross profits well above recent norms.” Bookmaker profitability and Levy receipts are closely linked but not identical, and the each-way bettor sits at the customer end of both flows.

The 2024-25 Horserace Betting Levy returned £108.9 million, up from £105.3 million the previous year. The 2025-26 figure was budgeted at £103 million, reflecting projected turnover pressure. The 2024 grants from the Levy split into £66.9 million for prize money, £19.4 million for regulation, and £7.9 million for welfare and training. Those numbers determine what the racing industry can do with the resources it has. Understanding how they relate to the each-way bettor’s slip is more useful than most punters realise.

What the Levy Actually Is

I had a conversation with a friend who assumed the Levy was a tax paid by the customer on every slip. It is not, in any direct sense. The Horserace Betting Levy is a statutory contribution paid by licensed betting operators to the Horserace Betting Levy Board, calculated as a percentage of the operator’s gross profits from bets struck on British horse racing. The current rate sits at 10 per cent of gross profits on UK racing bets, applied uniformly across UK-licensed operators.

The customer does not see the Levy on the betting slip. The customer’s bet is settled at the price offered. Out of the operator’s gross profit on that bet — the operator’s margin after paying winning customers — 10 per cent is contributed to the Levy. The Levy Board then administers the receipts: distributing grants for prize money, funding the British Horseracing Authority’s regulatory functions, and supporting welfare and training programmes for racing professionals.

The economic incidence of the Levy — who effectively pays it — is more nuanced than the legal incidence. Operators set their prices and promotional structures with the Levy cost factored in. Customers therefore indirectly bear part of the Levy through slightly tighter prices than they would receive in a Levy-free environment. The exact split between operator-borne and customer-borne incidence depends on the competitive structure of the market, but the practical answer is that the Levy is partly a cost on the operator and partly a cost on the customer, mediated through pricing.

The £766.7 million of online horse-racing GGY in 2024-25 — slightly down from £771.1 million the previous year — is the base from which the Levy is calculated, after adjustment for off-course shop turnover and other contributing channels. The £108.9 million Levy figure represents roughly 14 per cent of the online GGY base, with the off-course shop contribution and other channels making up the difference between the headline ratio and the headline figure.

The 108.9 Million Snapshot

The £108.9 million for 2024-25 was up on the previous year’s £105.3 million, but the year-on-year comparison hides a longer-term pressure. Levy Board reporting confirmed that contributions had fallen 8 per cent year on year on a comparable basis, 15 per cent against 2022-23, and 19 per cent against 2021-22. The recent year-on-year improvement masks a multi-year structural decline as turnover at Core Fixtures contracted and customer behaviour shifted toward smaller stakes and the Premier Fixture programme.

Within the £108.9 million figure, the 2024 grant allocation tells the story of what the racing industry prioritised. £66.9 million flowed to prize money grants — the largest single allocation — supporting the £194.7 million total 2025 prize money base. £19.4 million went to regulation, funding the British Horseracing Authority’s integrity functions, raceday officials, post-race testing programmes, and licensing administration. £7.9 million went to welfare and training, supporting the people who actually work in the industry — jockeys, stable staff, trainers, breeders.

The link to bookmaker profitability is direct but variable. Alan Delmonte’s observation about the unusually strong February and March 2025 bookmaker gross profits points to the periods when Levy receipts run highest — periods when favourites underperform, when long-priced winners come in, or when racing volumes peak around festival weeks. The reverse periods, when favourites dominate, compress operator margins and Levy receipts together. The 2024-25 Levy figure reflected a mixed year of these dynamics, with the strong February-March stretch offset by softer summer turnover.

Where the Money Goes

The prize-money grant is the most visible Levy allocation to the racing world. £66.9 million in 2024 grants supported the prize fund across the calendar, with allocation weighted toward fixtures that attract larger fields and stronger commercial interest. The Premier Fixture programme has benefited disproportionately from prize-money concentration in recent years, with average prize money per Premier race significantly higher than per Core race. That allocation tracks the turnover gap — Premier turnover per race rose 2.7 per cent in 2025 while Core fell 8.6 per cent, and prize money has followed.

The regulation grant of £19.4 million in 2024 funds the BHA’s daily operations: raceday officials, equine welfare standards enforcement, anti-doping testing, licence administration for trainers, jockeys, and other industry professionals. The integrity infrastructure that allows customers to bet with confidence in the fairness of the result sits behind this allocation. The post-race testing programme, in particular, is funded substantially through the Levy.

The welfare and training grant of £7.9 million supports racing’s people. The Injured Jockeys Fund, training schemes for stable staff, retraining initiatives for retired racehorses — all draw on this allocation. The 20,000-plus people employed across the 59 racecourses, 500-plus training yards, and 660 breeders depend partly on the welfare infrastructure this funding maintains.

The structural relationship between the licence framework that generates the Levy and the consumer-protection structure that protects the customer is closer than most punters appreciate. The detailed walkthrough of what the licence requires of operators and how customer protections work in practice sits at the UKGC licence and each-way bettors. The licence and the Levy are the two ends of the same regulated economy — one defines how the operator must behave, the other captures part of the operator’s economic activity to fund the racing industry that produces the racing being bet on.

The 2025 Budget Context

The Autumn 2025 Budget was watched closely by the racing industry because the Treasury had been consulting on proposed changes to remote gambling duty rates that would have affected racing turnover significantly. The Betting and Gaming Council’s chief executive Grainne Hurst warned that “massive tax increases for online betting” could compound the structural pressure on the regulated sector. Industry analysis suggested a 21 per cent rise in gambling tax on horse racing would cost the sector £66 million a year and 2,752 jobs.

The eventual Budget outcome was less severe than the worst projections — the BHA’s Brant Dunshea framed the result as a Chancellor who had “listened to our concerns” — but the underlying tax pressure on UK gambling has not disappeared. Future Budgets will revisit the question, and the racing industry’s reliance on Levy receipts means each Budget cycle creates a discrete risk to the funding base.

The 2025-26 budgeted £103 million Levy figure reflects realistic expectations against this backdrop. The combination of turnover pressure (down 4.2 per cent through Q3 2025 against the prior year) and unchanged Levy rates produces a modest projected decline. The longer-term trend depends heavily on whether the regulated turnover base can stabilise — through the Premier Fixture programme, through the affordability-check framework reaching its mature steady state, and through any future changes to the broader gambling tax structure.

The Slip and the System

I will close with the answer to my trainer friend’s original question. The reason the prize money on his Saturday handicap had gone up while his entry fees had stayed flat was the Premier Fixture programme’s concentration of Levy-funded prize money on the higher-profile cards. The architecture flows from the customer through the operator through the Levy to the racing yard. Each step is invisible to the customer placing the slip, but each step is the reason the racing exists in the form the customer chose to bet on. The each-way bettor who chooses a UK-licensed operator over an unlicensed alternative is, in a structural sense, helping fund the next season’s racing — not through their bet directly, but through the Levy-bearing turnover their bet generates. That is a quiet point to carry into the betting shop. The slip is one transaction. The system the slip sits inside funds the racing.

Prepared by the Racing Place Betting editorial staff.