What Are Rule 4 Deductions

Rule 4 is a mechanism through which deductions are made to horse racing bets when a runner withdraws from a race. This rule is often not known or misunderstood by casual punters. Subsequently, it can cause a certain amount of shock when deductions are made to someone’s returns without any further explanation.

Dimitris Pappas Jun 21, 2020

Why Bookies Use the Rule 4 Deductions

Rule 4 deductions are made to account for the change in the dynamics of a race. The case of horse racing non-runners, after the line-up has been announced, affects the remaining participants’ chances of winnings.

For example, if there were six runners in a race and one pulled out, the remaining ones would only have to beat four competitors rather than five. Because of the physical changes to the race, the odds of those remaining need to be adjusted accordingly. For those that place a bet after a withdrawal, the advertised odds will reflect the new dynamics.

However, if you’ve already made a bet and locked in the odds, the changes won’t be reflected in the price you received. Therefore, bookmakers have to make deductions after the race is over and before the payout is processed. These are Rule 4 deductions.

Rule 4 deductions calculator

Even though Rule 4 is one of the most straightforward horse racing betting terms, many people are wondering how the deductions are made. We know that a change of dynamics can initiate Rule 4, but how do bookmakers calculate the amount to deduct from a bet?

Rule 4 deductions are calculated by looking at the odds of the horse that’s been withdrawn. It’s important to note that the deductions apply only to the win portion of your bet. In other words, only money from your profit is deducted, not from your stake.

In general, Rule 4 deductions are expressed as percentages. However, you can put these into financial terms by thinking about the rate of €1. For example, a 20% reduction means you’ll lose €0.20 for every €1 you bet. From here, a calculator is used to generate a percentage based on the odds of the horse that’s been withdrawn (see table below).

Rule 4 Deductions Table

Odds of Horse Withdrawn	Percentage/Cash Deduction
1/9 (1.11) or shorter	90% deduction (i.e. €0.90 for every €1 wagered)
2/11 (1.18) to 2/17 (1.12)	85% (i.e. €0.85 for every €1 wagered)
1/4 (1.25) to 1/5 (1.20)	80% (i.e. €0.80 for every €1 wagered)
3/10 (1.60) to 2/7 (1.29)	75% (i.e. €0.75 for every €1 wagered)
2/5 (1.40) to 1/3 (1.33)	70% (i.e. €0.70 for every €1 wagered)
8/15 (1.53) to 4/9 (1.44)	65% (i.e. €0.65 for every €1 wagered)
8/13 (1.62) to 4/7 (1.57)	60% (i.e. €0.60 for every €1 wagered)
4/5 (1.80) to 4/6 (1.67)	55% (i.e. €0.55 for every €1 wagered)
20/21 (1.95) to 5/6 (1.83)	50% (i.e. €0.50 for every €1 wagered)
Evens (2.00) to 6/5 (2.20)	45% (i.e. €0.45 for every €1 wagered)
5/4 (2.25) to 6/4 (2.50)	40% (i.e. €0.40 for every €1 wagered)
13/8 (2.63) to 7/4 (2.75)	35% (i.e. €0.35 for every €1 wagered)
15/8 (2.88) to 9/4 (3.25)	30% (i.e. €0.30 for every €1 wagered)
5/2 (3.50) to 3/1 (4.00)	25% (i.e. €0.25 for every €1 wagered)
10/3 (4.33) to 4/1 (5.00)	20% (i.e. €0.20 for every €1 wagered)
9/2 (5.50) to 11/2 (6.50)	15% (i.e. €0.15 for every €1 wagered)
6/1 (7.00) to 9/1 (10.00)	10% (i.e. €0.10 for every €1 wagered)
10/1 (11.00) to 14/1 (15.00)	5% (i.e. €0.05 for every €1 wagered)
Over 14/1 (over 15.00)	No Deduction

Rule 4 for betting exchanges

In exchange betting, horse racing Rule 4 deductions still apply but in a slightly different way. At platforms such as Betfair, a “reduction factor” is used to calculate how much to deduct from your profit. This factor is based on a horse’s chances of winning the race.

For example, if a reduction factor of 25% was set, then the traded price on all previously matched bets would be reduced by 25%. So, if you placed a €10 bet on a horse with a traded price of 8.0, your potential profit would be €70. However, if a 25% reduction factor is in action, you’d receive 75% of €70, which is €52.50. This means the revised traded price of your pick would be 6.25.

What happens with antepost bets?

A lot of horse punters elect to place their wagers months before a race takes place. Even though there is a high risk of your horse not participating in an event, you will gain significant advantages from backing it before the market settles.

One of them is that you will probably get higher odds compared to when we are closing into the event. The other is that the Rule 4 deductions do not apply to ante post horse racing betting. Bookmakers believe that the risk of backing a runner before the field is set covers the fact that a horse will pull out minutes before a race..

Frequently Asked Questions

Why is it called Rule 4?

Rule 4 is so-called because it’s listed as Rule 4(C) in the Tattersalls Committee rules on betting. The reason it’s in place is to ensure that the payout odds reflect a change in race dynamics. Therefore, because a horse has been withdrawn, you’ll receive a lower than expected payout due to Rule 4.

What happens if multiple horses are withdrawn from a race?

If multiple horses are withdrawn, multiple deductions will be made. In simple terms, the price is recalculated after a single withdrawal. Subsequent Rule 4 deductions are made on the recalculated price.

What does reverse Rule 4 mean?

If the number of runners becomes equal to or less than the number of paid places in a race, reverse Rule 4 applies. This means your odds lengthen because you’ll have more chance of winning the bet than you previously had.

How can I tell if my bet is affected by Rule 4?

Other than reading this guide and understanding the nuances of Rule 4 horse racing standards, you’ll only know if a deduction has been made when you receive your pay-out. If in doubt, as the bookmaker your placed the bet with.

Are there any exceptions to Rule 4?

Other than the Rule 4 exceptions mentioned in our bookmaker reviews, the main thing you need to know is when a horse was withdrawn. If the race hasn’t been declared (i.e. the line-up finalised), then the bet is declared as an ante-post bet. In these situations, bets on non-runners are classed as losers, rather than being subject to Rule 4.

Does this Rule apply to the Cheltenham Festival?

Absolutely. Though not very common for horse to pull out of events like that, the Rule 4 Deductions will apply in case a horse retires from the race before it starts. The Cheltenham bookmakers will adjust the new prices and you will be paid on the new odds.

Does Rule 4 apply to all horse racing events?

Yes. Rule 4 is an industry-wide standard that all bookmakers use for horse racing events. Even though you might not like seeing your returns reduced, it’s the only fair way to ensure everyone, including the bookmakers, are happy.