Regulatory
Betting Levy
Definition
A statutory contribution paid by bookmakers, most notably the UK Horserace Betting Levy, used to fund the relevant sport.
Key takeaways
- A betting levy is a statutory contribution from bookmakers that funds the sport they take bets on; the UK Horserace Betting Levy is the leading example.
- The UK levy is charged at 10% of operators' profits on bets on British horseracing above a £500,000 threshold.
- Since 2017 it has applied to all operators offering bets on British horseracing, including those based overseas.
Why it matters
Betting levies are a recurring point of negotiation between operators and the sports they take bets on. The UK Horserace Betting Levy, administered by the Horserace Betting Levy Board, channels a percentage of bookmaker gross profit on UK horse racing back to the racing industry. The mechanism dates to the 1960s and is periodically reformed. Similar arrangements exist for other sports and in other jurisdictions, with varying structures.
The levy's economics matter for the wider sports ecosystem. Racing in particular relies heavily on levy income, alongside prize money funding and media rights. Operators argue the levy reduces their margin on racing and limits price competitiveness; racing argues the funding is essential to sustaining the product they take bets on. The political dynamic is ongoing and the levy mechanism has been periodically extended in scope, including to offshore operators taking bets from UK customers.
Sources
- Bookmaker Levy - Horserace Betting Levy Board
- The Horserace Betting Levy (CBP-7368) - House of Commons Library
Frequently asked questions
Is the UK levy the only example?
No. Australia, France, and several other markets have analogous funding mechanisms for racing. The structures vary. Some are direct levies on gross profit; others use product fees paid to a racing authority for the right to take bets on its product.
Do offshore operators have to pay the levy?
In the UK, the levy was extended in 2017 to cover all operators taking bets on UK racing from UK customers, regardless of where the operator is licensed. This was a substantive expansion of the levy's scope.