International Levy Comparison: How Britain Stacks Up

Introduction: Global Funding Models

Horse racing operates under different funding models around the world, with each jurisdiction taking its own approach to capturing betting revenue for the sport’s benefit. Understanding these variations provides context for assessing Britain’s levy system and its impact on races like the Epsom Oaks.

International comparisons reveal significant disparities in how much betting revenue returns to racing. The UK’s effective levy rate of approximately 8.5 per cent of gross gaming yield contrasts sharply with Australia’s 18.4 per cent, highlighting a gap that affects prize money levels, racecourse investment, and the sport’s overall competitiveness.

These differences influence where owners choose to race their horses and how breeding patterns develop across regions. When one jurisdiction offers substantially higher prize money, quality horses gravitate toward those opportunities. British racing must compete for talent within this global marketplace, making the levy rate a matter of international significance.

This analysis examines the UK system alongside Australian and French models, identifying strengths and weaknesses of each approach and considering implications for British racing’s future.

UK Levy System Overview

Britain’s Horserace Betting Levy has operated since 1961, evolving through multiple reforms that have shaped its current form. The levy captures a percentage of bookmakers’ gross profits from British racing, with revenue distributed through the Horserace Betting Levy Board.

Levy yield for 2026/25 reached £108.9 million, supporting prize money, racecourse improvements, veterinary science, and integrity services. This represents the fourth consecutive year of increase, reflecting reforms that brought offshore bookmakers within the levy’s scope.

The current rate stands at ten per cent of bookmakers’ gross profits on British racing. This rate was established by government following industry-wide negotiations that balanced racing’s desire for higher returns against bookmakers’ resistance to increased costs.

Anne Lambert CMG, Interim Chair of the Horserace Betting Levy Board, acknowledged both progress and challenges: “Racing is facing significant challenges so I am delighted to report that in 2026/25 the Board’s expenditure supporting Racing was £94.3m.” Her words capture the tension between improved levy collection and ongoing industry pressures.

Distribution follows structured allocations that prioritise prize money while maintaining investment in infrastructure and services that underpin racing’s operations. The Derby Festival, including the Oaks, benefits from weighted allocations that reflect flagship events’ importance to the sport’s profile and betting appeal.

Critics argue that ten per cent captures too little of the value that racing generates for bookmakers, particularly given declining betting volumes that reduce total levy yield despite a stable rate. Industry lobbying continues for reforms that would increase returns to racing, though bookmaker opposition makes significant changes politically difficult.

Australia and France Models

Australia’s point of consumption tax model takes a different approach, capturing revenue based on where bets are placed rather than where bookmakers are licensed. State-level taxes typically range from fifteen to twenty per cent of gross revenue, with significant portions returned to racing.

The higher Australian rate delivers substantially more funding per betting dollar than Britain’s system. This additional revenue supports prize money levels that attract international horses and helps Australian racing compete globally for talent. However, the model also imposes higher costs on bookmakers, potentially limiting betting market competition.

Racing Victoria, the governing body for one of Australia’s major racing states, distributes over A$200 million annually in prize money, reflecting revenues that dwarf British equivalents relative to population. The Melbourne Cup meeting alone offers prize money that exceeds some British Classics’ annual totals.

Australian racing authorities have used this funding advantage to modernise facilities, invest in technology, and market the sport internationally. British visitors to Australian racing often note infrastructure quality that reflects sustained investment over decades.

France operates through PMU, a monopoly betting organisation that returns approximately 80 per cent of turnover to punters while directing remaining revenue to racing. This mutuel system ensures that racing captures substantial returns from betting without competing with private bookmakers for market share.

The French model delivers consistent funding that insulates racing from betting market fluctuations affecting competitive jurisdictions. Prix de l’Arc de Triomphe prize money regularly exceeds British equivalents, demonstrating the financial advantages that monopoly systems can provide.

However, monopoly models limit consumer choice and may produce less competitive odds than markets with multiple operators. British punters benefit from bookmaker competition that delivers promotional value and price competition absent from monopoly jurisdictions. The trade-off between racing funding and consumer value represents a genuine policy dilemma.

Implications for British Racing

International comparisons highlight both strengths and weaknesses of Britain’s current approach. Understanding these dynamics helps contextualise debates about potential levy reforms and their impact on races like the Oaks.

The prize money gap with international competitors affects Britain’s ability to attract quality horses. When Australian or French races offer substantially higher returns, owners may redirect horses to those meetings rather than contesting British Classics. This dynamic particularly affects international raiders who can choose where to campaign.

Breeding patterns respond to prize money incentives over time. If British racing consistently offers lower returns, breeders may focus on producing horses suited to more lucrative jurisdictions. This long-term effect threatens the domestic breeding industry that sustains British racing’s quality.

Arguments for levy increases point to the gap with international competitors as evidence that Britain undercharges bookmakers. Advocates suggest that higher rates would generate funding needed to maintain competitiveness without fundamentally threatening the betting industry’s viability.

Counter-arguments note that Britain’s open market model delivers benefits to punters through competition, choice, and promotional value that monopoly or higher-tax jurisdictions cannot match. Increasing the levy might simply shift betting to grey markets or reduce overall turnover, potentially decreasing rather than increasing total returns to racing.

The optimal balance between capturing betting revenue and maintaining market vitality remains contested. Policy decisions in this area affect not just industry stakeholders but every punter who wagers on the Oaks and other British races.

Responsible Gambling

Whatever the funding model, gambling should remain within recreational limits. Different jurisdictions regulate gambling differently, but the principles of responsible betting apply universally. Set limits before wagering and seek help from BeGambleAware or GamStop if needed.