The Horserace Betting Levy in 2024-25: How a £108.9m Record Reaches Racing

The first time I tried to explain the Horserace Betting Levy to someone who wasn’t already in the racing industry, I lost them at the word “levy” and never recovered. It’s one of those bits of British racing infrastructure that everybody in the industry knows about and nobody outside it understands. The £108.9m the HBLB collected in 2024-25 — a record under the post-2017 reform — funded prize money, integrity, regulation, and a long list of things the average punter never thinks about while they’re working out the place return on their tenner.

What’s interesting about the 2024-25 figures isn’t just the record headline. It’s the structural pattern underneath: levy yield is rising while turnover is falling. Bookmakers’ increased profits are being generated from falling turnover, which is a phrase from the HBLB Annual Report that captures the entire commercial paradox of contemporary British racing. The levy is one of the rare success stories of recent years, but it’s a success that masks deeper problems.

How the levy actually works

The Horserace Betting Levy is a statutory charge on bookmakers’ gross profits from British horse racing bets. It’s not paid by the punter directly — the punter pays the bookmaker, and the bookmaker pays a percentage of their gross profit (their margin) to the Horserace Betting Levy Board. The Board then distributes the money to British racing through prize money, integrity services, veterinary research, and a handful of other categories.

The current rate is set at 10% of gross profits above a small threshold, applied to bets placed on British horse racing by UK customers. The mechanism was reformed in 2017 to bring online and offshore operators into scope, which is why the 2017 reform is the inflection point most levy commentary refers back to. Before the reform, online operators based offshore were largely outside the levy net. After 2017, they were inside it, which is why the post-2017 yield figures are the benchmark for the current commercial cycle.

The 2024-25 figure of £108.9m is the highest annual yield since the reform. It’s up from £105.3m in 2023-24 — modest growth in absolute terms, but the growth direction matters because it’s the third consecutive year of yield increase. The trajectory is one of slow but steady recovery in the levy’s commercial base, even as the underlying turnover figures tell a different story.

For the punter, the levy is largely invisible. The bookmaker doesn’t itemise it on the bet slip. The price you take on a place bet isn’t directly affected by the levy in the short run. The longer-term effect is that the levy income supports prize money, which supports the field sizes and competition levels that make the racing worth betting on. Without the levy, British racing would have substantially weaker prize money and thinner fields, which would in turn weaken the place markets you’re betting into.

The 2024-25 record in context

The £108.9m headline figure needs to be read alongside the turnover data to make sense. Levy yield rose to a record. Turnover per race fell 8% year-on-year in 2024-25, was down 15% against 2022-23, and was down 19% against 2021-22. The Racing Report Q3 2025 from the BHA showed that the first three quarters of 2025 ran 4.2% below the same period of 2024 on total turnover, and 12.8% below 2023.

The split between Premier Fixtures and Core Fixtures tells the more granular story. Premier Fixtures — the marquee meetings, the Festival weeks, the Group race afternoons — saw turnover per race rise 2.7% in 2025. Core Fixtures — the ordinary midweek meetings, the small-field handicaps at provincial tracks — saw turnover per race fall 8.6%. The market is concentrating on the headline events at the expense of the everyday racing, and the levy is being squeezed at the bottom of the pyramid while remaining healthy at the top.

Anne Lambert, the Interim Chair of the HBLB, framed the financial picture in the 2024-25 Annual Report by noting that the Board will exercise appropriate prudence in expenditure decisions and maintain sufficient reserves, because bookmakers’ increased profits are being generated from falling turnover. That single sentence is the structural diagnosis of British racing’s commercial position. The operators are making more money on less bet. The levy yield benefits in the short run because it’s tied to operator profit rather than to turnover. The longer-run concern is what happens to the underlying racing economy if the trend continues.

The gap between yield and turnover reflects margin expansion at the operator level. With turnover falling, operators are extracting more margin per pound bet. That’s partly a function of pricing — tighter prices on busy markets, fewer concessions on quieter markets — and partly a function of customer mix, with the surviving regular punters being more sophisticated and the casual punters concentrating their activity on marquee events. The margin expansion is sustainable in the short run and concerning in the long run.

Where the money actually goes

The levy’s expenditure breaks down into three main categories. Prize money is the largest single line. Integrity and regulation funding is the second. Veterinary science and equine welfare is the third. The detailed allocation is published in the HBLB’s Annual Report and varies year to year based on the Board’s priorities.

The 2025 prize money budget was £72.7m, an increase of £2.2m on the £70.5m allocated for 2024. The increase is relatively modest compared with the headline yield growth, which reflects the Board’s cautious approach to forward commitments in an uncertain commercial environment. Anne Lambert’s prudence comment translates directly into expenditure restraint.

Integrity and regulation funding rose to £20.1m in 2025, up from £18.6m the prior year. This funds the British Horseracing Authority’s integrity work, drug testing, race-day stewardship, and the broader regulatory infrastructure that keeps British racing trustworthy. It’s the invisible work that makes the racing worth betting on at all. The 8% year-on-year increase reflects both inflation and the increasing complexity of the integrity environment — more testing, more data analysis, more cross-jurisdictional cooperation.

The remaining levy funds go to veterinary science, equine welfare, training and education, and a long tail of smaller programmes. The breakdown is in the public Annual Report and shows the diversity of what the levy actually supports. It’s not just prize money — it’s the entire ecosystem that makes British racing function as an industry rather than a sport.

For the punter, the link is indirect but real. Better prize money means stronger field quality. Better integrity infrastructure means more reliable racing. Better veterinary support means safer racing and fewer non-runners. The £108.9m flowing through the HBLB underwrites the racing that the place punter is betting on, and a healthy levy yield is the precondition for the racing being worth the bet.

The levy reform debate and what it means for 2027

The political conversation about the levy in 2026 has been less heated than the duty debate, partly because the BHA’s energy was directed at the GBD carveout in the Autumn Budget rather than at levy reform. Brant Dunshea, the BHA chief executive, made it clear that the carveout was the priority because the duty pressure was the more immediate commercial threat. The levy reform conversation has been deferred rather than resolved.

The structural issues with the levy haven’t gone away. The post-2017 mechanism captures online and offshore operators, but it doesn’t capture the unlicensed black market — operators outside the UK regulatory perimeter contribute nothing to the levy regardless of how much UK racing they take bets on. With the black market’s share of online gambling at around 9% in the first half of 2025 and growing, the levy is missing a meaningful and increasing share of what would otherwise be its taxable base.

The other structural issue is the demand-side problem the turnover figures expose. The levy can only collect on bets that are actually being struck on UK racing through licensed operators. If casual punters are migrating offshore or to non-racing products, the levy yield will eventually follow. The 2024-25 record was achieved despite the demand-side erosion, but only because operator margins are expanding. If margins compress under the duty pressure described in the Autumn Budget impact analysis, the levy yield could plateau or decline even with stable turnover.

Ismail Vali at Yield Sec has framed the structural problem in terms the levy community has been slow to internalise. Illegal online gambling in Great Britain is now knocking on the door of 10% market share, and it has achieved this through targeted exploitation of vulnerable audiences. Every pound that flows offshore is a pound that doesn’t fund the levy, doesn’t fund prize money, doesn’t fund the integrity work that makes the legal racing trustworthy. The black market is not just a consumer protection issue — it’s a structural threat to the commercial foundation of British racing.

What this means for the place punter

The practical implications for someone betting place markets through 2026 are subtle but real. The levy supports the prize money that draws the runners that fill the fields that determine the place terms. Healthy levy yield means healthy fields means meaningful place markets. The chain is indirect but it’s the chain that makes the bet you’re striking actually worth striking.

If you’re a regular UK racing punter, the most useful thing you can do is keep your activity within the regulated market. Stake with UKGC-licensed operators. Avoid the offshore alternatives that have no levy obligation. The few pounds of margin you might save on an inflated offshore offer is being extracted from a structure that wouldn’t sustain UK racing if it became the dominant model.

The 2024-25 record at £108.9m is, in the end, both an encouraging headline and a warning sign. The headline says the levy is working — the post-2017 reform brought in money that previously leaked out, the trajectory has been positive for three consecutive years, the support for British racing is at its highest level in a long time. The warning sign says the underlying turnover is falling, the casual base is eroding, and the offshore market is taking an increasing share. The next levy report will tell us which trend wins.