Anticipated Levy Increase Amid Declining Horse Racing Turnover
The Horserace Betting Levy Board (HBLB) is projecting a staggering £108 million ($144 million) in levy contributions for the 2024-25 fiscal year—a record high for the organization. This projection comes even as the turnover from horse racing betting sees a downward trend.
The Horserace Betting Levy is a compulsory payment from bookmakers earning over £500,000 in gross profits from British horse racing, calculated at a rate of 10%. The funds generated play a crucial role in supporting the racing industry.
If this projection holds, it would exceed the previous record of £105 million set in 2023-24. However, it’s important to note that the figures for the fiscal year ending March 31, 2025, are still provisional and will undergo further checks.
Initially, the HBLB had estimated a decline in levy income to around £100 million. Yet, a positive shift in bookmakers’ gross profits in February and March—most notably influenced by the Cheltenham Festival results—has led to an upward revision in the forecast.
Despite these optimistic levy expectations, overall betting turnover for the past year has decreased, with average turnover per race dropping by 8%. Comparatively, the projected figures for 2024-25 fall 15% short of the 2022-23 totals and are down 19% from those in 2021-22.
Given this higher income from the levy, the HBLB has committed approximately £11 million towards new grants aimed at various projects and initiatives within the sport. Moreover, £93 million will go toward prizes and maintaining the sport’s integrity and regulation.
Strategic Allocation of Increased Funds
HBLB Interim Chair Anne Lambert remarked that the favorable financial outlook offers reassurance for future endeavors. She expressed confidence in the organization’s financial health, suggesting that more funds will be allocated in the upcoming year. However, she recognized the potential long-term impact of diminishing turnover on expenditure plans.
"We remain committed to exercising prudence in financial decisions and will maintain adequate reserves, as increased profits are emerging from declining turnover," Lambert stated. "The sustainability of this trend over time remains uncertain."
HBLB Chief Executive Alan Delmonte provided insight into future projections, suggesting that the organization is currently estimating a levy yield of £103 million, based on projected payments from bookmakers starting in April 2025. This forecast will be continuously updated based on ongoing analysis, which often includes mid-year reviews with betting operators to align actual data with projected payments.
Caution Against New Taxation
In the context of the anticipated levy increase, the Betting & Gaming Council (BGC) has raised alarms about potential tax hikes within the sector. The UK Treasury recently initiated a consultation proposing a consolidation of the existing three tax rates on online betting and gaming into a single rate. The BGC warns this could inadvertently lead to increased taxes on online gaming, significantly affecting horse racing.
According to BGC CEO Grainne Hurst, "This marks the fourth consecutive year of record contributions, underscoring the sustained investment that regulated betting brings to British horse racing." She voiced concerns that, despite heightened levy contributions, the sport continues to face challenges, with betting turnover diminishing once again.
Hurst emphasized the importance of safeguarding this vital financial support from undue tax increases, suggesting that any new taxes could detract from investments and ultimately harm both punters and the racing industry. "Unregulated operators who do not contribute to taxes or adhere to safer gambling principles threaten the integrity of the sport," she added, highlighting the need for sustainable growth within the industry.
In summary, while the anticipated levy increase speaks to a robustness in bookmaker profitability, the overall landscape for horse racing betting remains fraught with challenges, underscoring the need for strategic financial stewardship to ensure the sport’s long-term viability.