Rule 4 Deductions Explained

You may have heard or seen the term Rule 4 mentioned, either whilst watching horse racing on television or whilst reading through the horse racing category on the forum if you are a PA member. What is Rule 4 though and how does it affect both betting and matched betting?

Within horse racing, for whatever reason, a horse that has been entered into a race may not actually run. If a horse does not run they are declared as a non-runner which will be indicated by “NR” on the race-card. As there are fewer horses running in the race this, in turn, impacts the odds on the remaining horses in the race. Their odds will be reduced and this is known as a Rule 4 and the odds will be reduced by a percentage factor. The percentage amount, by which the remaining odds are reduced, is dependent on the odds of the horse withdrawn. If it is a high odds horse then the reduction factor will be low and if it is a low odds horse the reduction factor will be high. If the horse that is withdrawn has odds of 15.0 or above then there will be no reduction in the odds of the other horses at all.


The Impact Of Rule 4 Deduction When Matched Betting

If you have placed your back and lay bets already, and they have matched, you do not really need to worry about this reduction. Bookies work from a set table of reduction percentages (see below) by which they reduce the odds. Exchanges work slightly differently from this, in that they provide a “reduction factor”, in the form of a percentage figure. This is based on the forecast price for that horse.

Rule 4 Deduction

So in this example, if the horse Seefood were to withdraw then all of the other horses in the race would have their odds reduced by 22.6%.

Now as mentioned if you have already backed and laid, and your bets have matched, then you don’t need to overly concern yourself with this as the reduction factor should usually be about the same between the bookie and the exchange. This means that, the majority of the time, you will either be a few pence up or down on your original matched bet. The only impact that you should really be aware of, in regards to Rule 4, is if the offer that you are doing is a minimum odds related offer, for example, the Bet365 4/1 offer. If the odds are brought beneath the minimum odds by the Rule 4 then your selection will not be eligible any longer. Again nothing to overly worry about really. Indeed, as alluded to earlier, a Rule 4 deduction can actually have a positive effect as a matched bettor. On occasion the bookie may apply a smaller reduction than the exchange, therefore, creating an artificial arb and giving you some unexpected profit.


Rule 4 Table

NON-RUNNER ODDS

DECIMAL ODDS

DEDUCTION (IN £)

% IN WINNINGS

1/9 or shorter 1.11 or shorter 0.90 90%
2/11 to 2/17 1.12 to 1.19 0.85 85%
1/4 to 1/5 1.2 to 1.27 0.80 80%
3/10 to 2/7 1.28 to 1.33 0.75 75%
2/5 to 1/3 1.34 to 1.44 0.70 70%
8/15 to 4/9 1.45 to 1.57 0.65 65%
8/13 to 4/7 1.58 to 1.66 0.60 60%
4/5 to 4/6 1.67 to 1.83 0.55 55%
20/21 to 5/6 1.84 to 1.99 0.50 50%
(Evens) 1/1 to 6/5 2.0 to 2.24 0.45 45%
5/4 to 6/4 2.25 to 2.59 0.40 40%
8/5 to 7/4 2.6 to 2.79 0.35 35%
9/5 to 9/4 2.8 to 3.39 0.30 30%
12/5 to 3/1 3.4 to 4.19 0.25 25%
16/5 to 4/1 4.2 to 5.4 0.20 20%
9/2 to 11/2 5.5 to 6.99 0.15 15%
6/1 to 9/1 7.0 to 10.99 0.10 10%
10/1 to 14/1 11.0 to 15.0 0.05 5%
14/1 or More 15.0 or More 0.00 0%

 


Calculating New Odds Following a Rule 4

Now you only really need to calculate new odds if you have either backed without laying or laid without backing. As we discussed earlier, if you have backed and laid and are fully matched then you don’t need to do anything. However if you are in the situation where for example, you have backed a horse and a Rule 4 has been applied prior to you placing your lay bet or if you have a lay bet that has matched but you haven’t placed a back bet and need to cash out then Profit Accumulator Members can use the Profit Accumulator Rule 4 Calculator.

The Rule 4 Calculator is a handy tool for adjusting your odds after a horse racing Rule 4 deduction (this happens after a non-runner).


Backed Without Laying
You have a back bet on a horse and haven't laid it yet. Before laying there is a non-runner in the race and thus a Rule 4 deduction applied to your odds.

Select the Backed without laying option on the calculator:
rule 4 deduction

Enter your back odds and also the deduction in pence:
rule 4 deduction

The calculator will then display your new adjusted back odds, you can then place your lay bet based on these odds using the standard calculator:
rule 4 deduction


Laid Without Backing

You have a lay bet on a horse and haven't backed it with a bookmaker yet. Before backing, there is a non-runner in the race and thus a reduction applied to your odds. Now if you have no other bets on that horse race in the exchange you can simply use the cash out option provided by Betfair and Matchbook or the trade out option in Smarkets to cash out your bet and, therefore, cancel it. However, if you have other bets on that market, then you will need to use the Rule 4 calculator to work out your new adjusted lay odds:

Select the Laid without backing option on the calculator:
rule 4 deduction

Enter your lay odds and also the reduction percentage given to you by the exchange.
rule 4 deduction

The calculator will then display your new adjusted lay odds, you can then sort out cashing out this bet using the Fixabet Calculator based on these odds:
rule 4 deduction

Full Fixabet Calculator guide available here to Platinum Profit Accumulator members.


Calculating Profit/Loss Following Rule 4

If you wish to see what your profit/loss you can use the following:

For a horse that won:
Bookmaker Return - Back Stakes - Liabilities = Profit/Loss

For any horse that didn't win:
Lay Stake (After Commission) - Back Stakes = Profit/Loss

If you've placed Each/Way bets then it is calculated as follows

For a horse that placed:
(Win Lay Stake (After Commissions) - Win Back Stake) + (Bookmaker Return - Place Liability) = Profit/Loss

For a horse that hit the extra place:
Bookmaker Return + (Win Lay Stake - Back Stake) + (Place Lay Stake - Back Stake) = Profit/Loss


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For more info on what matched betting is, check out these articles: