The Horserace Betting Levy Board (HBLB) is mandated to collect a statutory levy from horse racing bookies and the Tote successor business, which it then distributes for the enhancement of horseracing and horse breeds, as well as the promotion of veterinary research and education. HBLB is likewise a non-departmental public tribunal.
What are the Horse Racing Betting Levy Boards Main Objectives? The legislative goals of HBLB are to collect the Levy from bookmakers and to use the proceeds for the advancement of all horse breeds, development or promotion of veterinary research or veterinary education and the general advancement of horseracing. The Levy is 10% of the amount by which an Operator’s earnings on leviable bets for the Levy period exceed the exempt amount of £500,000 (as determined under Section 27A of the Betting, Gaming, and Lotteries Act 1963). A leviable bet pertains to horse racing in Great Britain at the time the bet is placed, according to Section 29A(1) of the 1963 Act.
HBLB, unlike several other NDPBs, gets no central government grant-in-aid or National Lottery financing. Instead, the Act requires it to collect a statutory charge on bookmakers’ horse racing activities. The Levy on off-course betting accounts for the majority of HBLB’s revenue. It is levied on bookmakers as a proportion of their gross earnings from British horserace betting. The vast bulk of Levy’s earnings goes directly to horse racing.
HBLB is an essential financial donor to horseracing. The primary objective of creating the Levy, and hence the HBLB, was to compensate racing for the projected loss of attendance when off-course betting shops were legalized in 1961. Today, HBLB directs Levy revenues to a variety of horseracing-related projects.
Following the 1963 Act, the Levy is collected (as amended). The Levy is allocated each year following the HBLB Business Plan. Approximately 90% of Levy’s money is devoted to developing horse racing each year, albeit at the discretion of the Horseracing Board.
The Horseracing Levy and the Bookmaker
The Horserace Betting Levy Board is a statutory organization in the United Kingdom mandated by primary law to collect a statutory Levy from bookmakers and betting exchange providers (Operators).
Notes providing guidance, practical from Levy periods beginning 1 April 2021, on the assessment and collection of monetary contributions from operators, relating to the provisions in the Betting, Gaming and Lotteries Act 1963 and the Horserace Betting Levy Acts 1969 and 1981 as amended by the Horserace Betting Levy Regulations 2017, can be found here.
Up until the implementation of the Horserace Betting Levy Regulations in 2017, the Bookmakers’ Committee recommended annually to the Board the categories, rates, conditions, and definitions of the Levy Scheme for the following year and, if necessary, considered revising such recommendations in light of the Board’s observations.
For decades, horse racing and betting have gone hand in hand. Because the two depend primarily on one another, they have been forced to collaborate on financial matters.
Many individuals are unaware of how the process works, and this was updated in 2017 to reflect changes in how betting methods function and the amounts of money that are now involved. Consequently, it said that the horse racing sector would gain significantly from the reforms, which we will discuss later in the article.
The Horseracing Levy – Inner Working and Effects
The Levy went into effect in 1961, the same year high street bookmaking was legalized in the United Kingdom. As part of the legalization of high street betting, it was determined that a portion of the profits from bookmaker bets on horse racing would be reinvested in the sport.
The worry was that if individuals could wager outside of the racecourse, fewer people would attend races since it was more convenient for them. This concern was realized as racetracks in the United Kingdom decreased attendance. Consequently, trackside bookies earned less money, but ticket sales revenue also decreased, implying less money in the sport.
This is the primary reason for the Levy, and it was decided that the bookmakers would have to pay a proportion back into the sport to offset some of the downturns. It was a small amount, to begin with, but it kept pouring money into horse racing, and as high street betting increased, the money proved to be a lifeline for the sport.
The Horseracing Levy – Proceeds from Bookmakers
It was announced in 2018 that the Levy would be paid a record value of £95 million for 2017-18. This was the first payment made under the new guidelines, and it came as a welcome boost to a sector that had been suffering in previous years.
The funds are then reinvested in sports. This might include the care of stables, retirement homes for retired racehorses, prize money, facility improvements, the capacity to award grants when required, and training new riders, trainers, and owners. Some have hailed it as a much-needed infusion of cash to keep operations running, while others argue that it is still insufficient.
The betting sector is typically relatively steady and has been rapidly expanding since the advent of online and mobile gambling, and it is impossible to predict how much money will be earned one year vs the next.
The Horseracing Levy and its Benefit to Horse Racing
Thanks to Levy, it would be easy for the Punters and even members of the Horse Racing Fraternity to believe that horse racing is on a good wicket. The Bookmakers do all the work and have to pay the Horseracing Authorities ten per cent of their profits. The Bookmakers and the Horse Racing Authorities require each to function optimally to assist the other in creating a symbiosis for each to benefit optimally.
They require each other to develop. Horse racing will be one of, if not the, most lucrative markets for any bookmaker, particularly in the United Kingdom. If the horse racing business slows or the quality falls, the bookmaker will have fewer races to market and earn less money, which would mean that the Horse Racing’s ten per cent will be worth less on an absolute basis.