A landmark five-year agreement worth at least £40m has been signed between online betting exchange company Betfair and British Racing.

British Racing – comprised of the British Horseracing Authority (BHA), the Racecourse Association and the Horsemen’s Group – signed the deal last week, which will help secure the long term funding of the sport.

Over the period, Betfair has agreed to pay British Racing 10.75% of all revenues on the sport from its UK customers.

The five-year agreement will replace Betfair’s current annual voluntary Horserace Betting Levy payments.

Paul Bittar, chief executive of the BHA: “We are delighted that we have been able to reach an agreement with Betfair, one which represents a landmark for both the racing and betting industries.

“It brings many benefits, including substantial and increased guaranteed funding, as well as importantly providing certainty for the sport in relation to Betfair’s contribution.

“We hope that similar arrangements with other betting operators will follow.”

Martin Cruddace of Betfair said: “This deal is a genuinely historic moment. For the first time, British Racing and Betfair have proved it is possible for us to work together on a truly commercial basis. We hope that this marks a new era and call on other betting operators to adopt similar agreements to help ensure a strong, healthy and vibrant horseracing industry in this country.”