Rule 4 in Horse Racing

Rule 4 and Rule 4 deductions cover the situation where a horse is withdrawn from a horse race. The odds for bets placed on remaining horses are then adjusted to account for the non-runner(s).

Rule 4 is officially called "Rule 4(c)" and dates back to 1886 when the was formed as an independent dispute resolution service for punters and bookmakers. The Tattersalls Committee Rules must be obeyed by on-course bookmakers in the UK (unless otherwise stated) and form the basis for many of the rules used by High Street and internet bookmakers.

What is Rule 4 in horse racing betting?

Rule 4 covers the situation in which a horse is withdrawn from a specific race, and consequently, odds for all bets placed on the remaining horses are adjusted to account for the non-runner(s). Rule 4 deductions are applied to bets placed on horses that remain in the race following another horse(s) being declared a non-runner to enable bookmakers to refund bets on withdrawn horses to punters and maintain a level book.

The level is of deduction applied is found from the below chart.

When are Rule 4 deductions applied?

Rule 4 deductions are applied to bets on horses that eventually run in a race where one or more horses have been withdrawn following the final declarations (typically 24-48 hours before the race).

What are the exceptions to Rule 4?

The most notable exception to rule 4 deductions are bets placed on the ante-post market. Ante-post bets are typically placed before the bookmakers betting market is opened for the race, ranging from 24 hours to anywhere up years before the desired race. The ante-post bets come with the added risk that your chosen horse, on the day of the race, is declared a non-runner. Bookmakers do not issue refunds for bets placed in the ante-post market for a horse that does not run.

Ante-post betting, for the above reasons, has become extremely popular. Cheltenham Festival, the highlight of the National Hunt racing season, has become one of the most notable ante-post betting fixtures in the calendar. It is a favorite for punters trying their luck to find value bets and selecting the correct race for their chosen horses even years in advance.

How to calculate your returns after a rule 4 deduction?

The returns of bets suffering from a Rule 4 deduction can be calculated by dividing the deduction by 100 then subtracting this quotient from 1 and multiplying this answer by the bets original potential profit. This is outlined by the below equation:

Returns = Profit * ( 1  -  ( Deduction / 100 ) )

For example:

• you backed a horse at 6/1 with a £10 stake
• that race had a 4/1 withdrawal
• therefore, your Rule 4 deduction is "20 pence in the pound" rule 4 declared

The calculation of your returns after rule 4 deduction would be:

Returns = Profit * ( 1  -  ( Deduction / 100 ) )
Returns = £60 * ( 1  -  ( 20 / 100 ) )
Returns = £60 * 0.8
Returns = £48

How do you know if your bet is affected by Rule 4?

Races affected by Rule 4 deductions are declared by bookmakers either on your bet slip or on the race market. They will state the level of deduction and what time the rule 4 deduction was applied. Bets placed after the application of a deduction will be unaffected.

Why does Rule 4 exist?

Rule 4 exists in order to prevent punters from being able to back every remaining horse in a race (following non runners) with proportionate stakes to guarantee a profit, for example:

There is a field of 3 runners originally.

• Horse 1 @ 1/3 (1.33)
• Horse 2 @ 3/1 (4.0)
• Horse 3 @ 12/1 (13.0)

If Horse 1, the market leader, is withdrawn and there is no rule 4 applied then you would be able to bet on horses 2 and 3 at both 3/1 and 12/1 respectively.

This means that if either horse 2 or 3 should win the race (one of them has to) then you would win more than your original stake, assuming that you staked the same amount. It would then become impossible for the bookmaker, or person laying your bet to make a profit.

The existence of Rule 4 also ensures that punters, who have placed a bet on a horse that becomes a non-runner, will have their stake returned while bookmakers can keep their liabilities level and maintain a balanced book.

What happens if two horses withdraw from the race?

When multiple horses are withdrawn from the same race, there will be multiple Rule 4 deductions applied based on each horse's odds at the time of withdrawal.

When multiple horses are withdrawn the Rule 4 deduction is equal to the sum of each horse's Rule 4 deduction. For example, if a horse is withdrawn at 4/1 all bets on remaining horses have a 20p Rule 4 deduction applied, following the market being reformed a horse priced at 5/1 is withdrawn (15p deduction).

In this scenario bets on remaining horses now have the sum of a 20p Rule 4 deduction as well as a 15p deduction to contend with, totaling a 35p per £1 35% deduction of profits.

How does the rule 4 work on a betting exchange?

On betting exchanges, there is no Rule 4 as such. They instead use a reduction factor based upon a horse's implied probability of winning at the time of withdrawal from a race.

The Betfair Exchange, Britain's most popular betting exchange use the following example to explain how their reduction factor works:

You matched a back bet on the horse 'Diamond Night' for £10 @ 8.6.

• Your liability is £10.
• A horse in the same race is now withdrawn with a reduction factor of 16.2%
• (8.6 / 100 ) x 16.2 = 1.39 (this gives the amount to be reduced from the original price)
• 8.6 - 1.39 = 7.21 (this is the new price that you will be paid out if the horse wins.)
• Your new possible profit will be £62.10 (instead of £76 originally)

If a horse's implied winning probability is below 2.5% and is withdrawn then no reduction is made to bets on other horses.

Similar to the Rule 4 deduction, there can be multiple reduction factors imposed on a race where there are more than one non-runners.

Which countries apply the Rule 4?

Rule 4 is almost solely applied within UK and Irish horse racing. This is partly down to the fact that fixed-odds gambling is more prevalent in the UK and Ireland.

Whereas in France or the USA, a tote pari-mutuel system for betting is used. This is where all bets placed on a race are placed into a pool. The odds of a specific runner are computed by dividing the total pool (all bets on every single runner) minus any amount the house takes, divided by the amount wagered on that runner.

In the case of a non-runner, punters who backed that horse would be refunded their stake meaning other bets returns will be unaffected. The aim with tote betting isn't to beat a bookmaker, it is to find a winner that very few others would have picked to maximize winnings!

UK bookmakers offering fixed odds on international horse racing apply Rule 4 more often than not. It would be recommended that you find out your bookmakers policy on this before placing bets on these markets.

Where do you find the Rule 4 deductions today?

Rule 4 deductions will be declared by your bookmaker, listing non-runners in individual races. Alternatively, check the for non-runner information.

Do different bookmakers offer different Rule 4 deductions?

Yes, not all bookmakers make a deduction when the Rule 4 is just 5p on the pound, giving you the benefit of horses being withdrawn whose odds are greater than 10/1 (11.00) with no effect on your potential winnings.

However, some other bookmakers would only impose a 5p deduction should there be more than one 10/1 or greater horse withdrawn. It would be recommended that you researched your bookmaker's policy on Rule 4 to ensure that you always achieve maximum value with your bets, enhancing your ability to "bash the bookies".

Do "Best Odds Guaranteed" still apply with Rule 4?

If a "best odds guarantee" is applied to a bet that you have placed, it will still apply even if there is a rule 4 deduction in the race. The bet will be paid out on whatever return is better - the original odds with the rule 4 applied, or the starting price.

What is the maximum Rule 4 deduction?

The maximum Rule 4 deduction for any one race is 90p per £1 or 90% of winnings although a deduction of this level is very uncommon.