Rule 4 deductions are an industry wide practice to compensate from non runners. When a horse withdraws from a race, the probability of the remaining horses winning or placing increases. Rule 4 was introduced for this reason and is essentially a deduction of your former odds, in percentage.
The deduction will depend on the price that the withdrawing horse was currently at. A horse that was withdrawn that was priced at 2.0 for example will mean a higher deduction per £ staked compared to a horse that was withdrawn with a price of 10.0. Below is a table to show the levels of deductions and the corresponding odds:
The correct formula to work out Rule 4 deductions is as follows: (Decimal Odds – 1) x (1-decimal reduction factor) + 1 = new odds.
Exchanges use a slightly different method for calculating Rule 4 deductions and this is known as a Reduction Factor. The reduction factor is calculated on the forecast price and is displayed as a percentage. If a horse is withdrawn, the reduction factor is then applied to the remaining horses in the race. Unlike the fixed rule 4 deductions, the reduction factor percentage may be slightly lower than the bookmakers rule 4, but may also be a little higher. This means you may lose a small amount, or gain a little from the reduction, but this will usually only be pennies.
It’s worth noting that if you placed both your back bet and lay bet before any withdrawals, both the bookmaker and exchange will adjust either your back bet, or lay bet accordingly.
If however a withdrawal happens before you can lay off your bet please remember to work out your new back odds. We offer a downloadable Rule 4 calculator to help with this, all you need to do is enter your back stake details, followed by the rule 4 amount to quickly work out your new odds.