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I read elsewhere that Richard Hoiles (a member here I believe) had suggested a R4 formula based on the price of withdrawn horse and the overround at the time of the withdrawal…
I can see where he is coming from – and this would be a sensible solution if we were only talking about runners withdrawn after the SIS on course shows were up and we had one unified betting show and overround..
However, Rule 4 needs to be applied throughout the day to early morning prices etc and I think this type of solution would get very messy indeed for bookmakers…
I’m not entirely sure that there is an easy solution for the Rule 4 situation. The current situation does favour punters on the whole (bar when the place terms change) but the Tatts proposals were way too punitive to punters (and certainly weren’t supported by the big off course firmls. Until (and if) the bookmakers ever "go decimal" and incorporate something along the lines of Betfair’s mathematically sound reduction factors, I can’t see much of a change happening.
Is RH about to comment?
Marble – you miss the point. The suggested changes to the R4 were in the bookmakers favour when compared to the current situation.
If you based it on the overround at any given point, it would become nigh on impossible for punters to know what R4 would be applied to their bets.
exactly right marble, rule 4 should be totally abolished because the horse that wins would have won anyway, bookmakers are just parasites collecting mug punters money each year, currently £120M, passing it to the levy board so that rich owners can indulge in their pastime,
without owners the whole horse-racing industry would come to a standstill
Totally agree the proposed suggestion is the fairest (incidentally one I proposed on this forum a full five days before Richard proposed it on the Morning Line)
To say there should be no rule four deduction is absolutely brainless – I can assure you if there was no rule four in place than the number of late withdrawals of short priced runners would increase dramatically as those who are less than honest plot their coups.
The current system is too broad brushed and what is proposed is fairer. Agreed it will not be immediately obvious what scale of deductions will apply but I would suggest it was a small price to pay.
Paul
The problem would be that customers would have no idea of the various overrounds at the times of withdrawals – you would just be taking on trust that a certain bookmaker was applying the correct deduction based on their overround at the time. At least with the current system, everyone knows where they stand…
But isn’t the entire precept of a relationship with your bookmaker one of trust? If bookmakers do start abusing any new system word would soon spread like wildfire and they would soon lose custom.
Unfortunately no system is perfect, however in todays environment we do need a fairer system than the current Rule 4.
Much as most of us on this forum love to see the bookmakers lose they are, at the end of the day businesses. If the bookmakers implemented changes that were palpably unfair to the punters we would rightly be up in arms and complaining left, right and centre. Equally it is only fair that if a syatem is unfair to the bookmakers then it too should be adjusted.
Taking the automated calculation one step further – there is no reason why it could not also work in reverse as well. So in a case like New Approach or when a horse is supplemented in a race a "reverse" Rule Four could be applied.
It would also take major development to all existing systems curretnly used by bookmakers – and when you are talking about shop estates of thousands, making such changes would be very expensive indeed.
It would also make manual settlement of bets virtually impossible and again, punters wouldnt be able to work out what returns they were due.
I don´t get whats so complicated about the current system. You get a certain % taken off for the withdrawn horse depending on price, the prices are available from your bookmaker as are the rule 4 regulations.
Or we could have no Rule 4 and all bets reverting to SP if a non-runner is pulled out.
Punters have it good enough as it is – some bookmakers paid out on 6 places in Ireland last night!!
Unfortunately no system is perfect, however in todays environment we do need a fairer system than the current Rule 4.
Much as most of us on this forum love to see the bookmakers lose they are, at the end of the day businesses. If the bookmakers implemented changes that were palpably unfair to the punters we would rightly be up in arms and complaining left, right and centre. Equally it is only fair that if a syatem is unfair to the bookmakers then it too should be adjusted.
As I don’t bet with bookmakers it won’t affect me but what is wrong with the current system, who wants to change it? I can’t remember Hills, Corals or Ladbrokes etc wanting change and doesn’t thedarknight work for a major bookmakers, so what if it slightly favours the punter and it’s not perfect, what does it matter? punters lose out with the large overrounds at many meetings and are regularly ripped off on track with substantially lower prices than they could achieve with Betfair.
It would also take major development to all existing systems curretnly used by bookmakers – and when you are talking about shop estates of thousands, making such changes would be very expensive indeed.
Totally disagree with you there darkknight.
It should not be a major development at all, assuming there is a competent IT department and infrastructure in place in the first place, then the change is relatively simple. The coding could be done in a matter of days at most, with a couple of weeks for testing. Indeed it would only be a few hours work to knock up a database or Excel application to do the calculations.
Why should the software need to be rolled out to an entire estate? All that needs to happen is the calculation is carried out at head office
Once there are industry shows for a race then the deduction can be calculated by the SP IT applications and a general Rule 4 figure announced as now.
In terms of settling there would be no difference between applying a deduction generated from a table to applying a deduction generated by a computer it is only the source of the deduction that will change.
I would also suggest if you spoke to the majority of punters they would not be able to a) quote what the current rule four rates are and b) even if they knew what they were, be able to apply them correctly, especially in multiple bet calculations.
The problem with the original rule 4 changes that were proposed (and led to uproar in some parts) was pretty much based around the fact that it was proposed almost entirely with the oncourse market in mind. Once you get to the stage whereby you have to take different considerations into account for different marketplaces (ie oncourse and offcourse markets) that’s where it starts to get complicated.
Taken on their own in relation to the oncourse market, the initial proposals for change made a lot of sense. The original Tattersalls Rule 4 was devised before a lot of decimalisation and new, more modern, prices crept in, not to mention the explosion of the offcourse markets. Ergo the R4 system nowadays doesn’t make a lot of sense in today’s modern betting world and it can make life hard for the oncourse bookmakers in particular. The methodology does need updating but since you are dealing with two very different marketplaces it is hard to know what precisely to do to suit all quarters.
It also doesn’t help that many people have a complete aversion to change of any sort – not least when it comes to a lot of the old fashioned ways in which bookmaking still operates. I’ll admit I’m as guily as that in that I detest prices such as 85/40, 11/5, 15/4 and so on and so forth (hell, I hate 15/2, 17/2, 18/1, 22/1 et al, almost equally as much!!!!), however I’m beginning to think that my former colleague, who was very much pro turning over to decimalised prices entirely, mightn’t be far wrong in terms of progress and common sense.
Apologies for not replying earlier as I have been away for a few days.
Here is the best I can do to summarise my involvement with Rule 4 and why I passed comment on it in the first place.
I was down to do the headlines for C4 on the Morning Line on Saturday 31st May. As this can be a nightmare on the morning itself I always look out for topics that arise during the week.
On Tuesday 27th May the Racing Post carried the first rule 4 headline. Threads were started on the BF forum on which I posted my idea of including overround at 10.47 that morning under my user name ratpack:(so did not pinch it off anywhere else !!)‘There is a far more equitable solution to this argument which is as follows :
It is true that the fairness of a Rule 4 deduction does vary with not just the price at the time of withdrawal but also the overround of the market.
For example it is mathmatically incorrect for the deduction for an Even money chance to be the same in say a competitive market such as say one of the Scottich tracks where they may be betting to 110% and say a Kempton evening meeting with six books and an overround of 135%.
Therefore the Rule 4 deduction should be a function on not just price at the time of withdrawal but also the % overround at that time.
It is a simple grid to produce, is mathmatically more correct, more equitable and it would also mean there would be no point in the current practice of shortening horses that say bolt on the way to post in the hope that the lower SP would result in a greater R4 deduction. Even in a lower SP was returned at the time of withdrawal then unless other horses prices were pushed out it would be negated by the increased overround.Since computers are now used to collate SP’s this is now capable of being an easily automated two dimensional process.’
Whilst obviously I am known as a commentator within racing I am a qualified accoutant who worked prior to racing for five years as a strategic planning analyst for three major plc’s so is something I feel comfortable commenting on in terms of the basic maths.
A grid incorporating price at time of withdrawal and the overround was all I was seeking to suggest. The numbers in that grid are actually a mathematical equation but I deliberately did not seek to include numbers at this stage as it is the grid concept that I wanted to stress and did so on the show.
After the programme we received an unusually high number of e-mails and having been anxious to offer something constructive I as a matter of courtesy forwarded a paper to the Tatts Committee.
As has been reported they expressed interest in learning more whilst I have now at least in my own head come to terms with the maths involved and why the current rule is in punters favour in the majority of cases (will try and post an example below).I believe the grid to be workable in all cases and that it should extend down to longer prices than currently (though above say 25-1 it is probably not worth the hassle.) The grid does not have the current steps just rounds up to the nearest penny for any price and overround and I expressed in decimals.
It is not complex (certainly in comparison to say tricast and forecast dividends) and would just involve a simple look up table which is very transparent.Finally to deal with the query about early prices. Again it is easy to calculate the overround at the time of withdrawal. Indeed one of the reasons for bookmakers not pricing up early races as competitively as they might is the fear of being stung by a R4 deductions so a more robust rule would actually reduce the market overround in early prices to the benefit of the punter.
To conclude the proposal does have a correct arithmetic ‘solution’ which I am pretty sure I know, but feel it is better that an independant source produces which could then provide a basis for discussion as to the numbers that are to be used (should it still be skewed slightly in favour of the punter etc.) Whilst I am being asked to contribute to the process I still wish to stress my wish is solely that it is the grid system that is accepted less than the precise numbers in it (which can always be flexed over time if necessary).
Apologies for the long post but as i have found it is necessary to clarify ad nauseam the reasons for my involvement and the simple fact that it stemmed from a desire not just to rant about a headline but offer some constructive criticism to provoke debate. It is nothing to do with taking sides or championing a cause it is just about making the rule fair and equitable for all prices in all markets which the current rule patently is not.
Here is a rough attempt to show why the maths are not quite as simple as many may think.
Most would assume that if an Even money chance was withdrawn in a 100% market and all horses had been equally laid according to their price that 50p in £1 would be the correct deduction.However this is not so as the following shows : ( ready ?!)
Six horse market, one at Even money (50%), the other five all 9-1 chances (10% x 5) giving a 100 % market.
All horses are laid in proportion to their price so £50 on the even money chance and a tenner each on the other five. Therefore the bookmaker currently stands to neither win nor lose whatever the outcome.The even money chance is withdrawn triggering the 50p deduction.
The bookmaker refunds the £50 stake on the favourite and pays out on the 9-1 winner by deducting 50% of the profit ie £90 so £45 to the punter with the successful ticket
as well as refunding him his full £10 stake.
Therefore the bookmaker pays out £105 in total thus making a £5 loss on the race whatever the outcome despite the fact that before the withdrawal he was in a break even situation .If one of the 9-1 chances is withdrawn he would lose £1 on the race using the 10p in the £1 one would expect.
For anyone still with me I hope that shows why in fact in pure maths terms even 50p deduction for evens in a 100% market is actually not enough to be correct.
Threads were started on the BF forum on which I posted my idea of including overround at 10.47 that morning under my user name ratpack:(so did not pinch it off anywhere else !!)
Richard
Apologies if my post suggested you had "pinched" the idea – it wasn’t my intention – just a case of clumsy wording.
In hindsight wish I had added the planned additional comment "great minds think alike"
Thanks for replying Richard
I still think the cost of implementing such a Rule 4 system across every bookmaking system in the country shouldn’t be underestimated – that would definitely be the biggest barrier to it happening.
Regardless, if such a sweeping change were to be made, why not go the whole hog and go for a much more mathematically sound solution??
Betfair’s reduction factor – applied to the decimal price (i.e odds + mistake) is the mathematically "correct" solution to this problem in a 100% world. If you have a three runner race and all the runners are 3.0 – if one comes out you get a 33% reduction and, hey bingo, we have two 2.0 (even money) shots left..
Richard – whey couldn’t your idea of including an overround calculation in the formula simply be extended to this? So for example say a bookie bets 2.75, 2.75 2.75 in the above example – we apply the reduction factor 33% minus some overround based amount – lets say 3% – so (33-3) = 30% and we get prices of 1.925 for each of our remaining two competitors after the reduction has been applied to the 2.75.
You have just described exactly the same proposal !!
Just in decimal terms and the percentage as applied to the whole return (i.e stake suffers reduction as well) rather than the current R4 protocol of describing the % as applied to the profit only.
If you accept that the overround along with the price is necessary to produce a mathematically correct approach then it produces an equation which has a correct solution. Therefore there is no more mathematically ‘sound’ approach it is the same thing expressed in different ways.
The difficulty will be that the correct solution will show how much R4 in most instances is currently in favour of the punter so whether there will some political expediency for the numbers adopted becomes a matter of judgement.
If you don’t believe your proposal produces the same results as mine then give the reduction factor in the following three instances and I will try and prove it (will be a particularly anoraky post !!).
2-1 or 3.0 withdrawal in a 100% market
2-1 or 3.0 withdrawal in a 125% market
4-1 or 5.0 withdrawal in a 100%market.Remember you presumably will be expressing the RF as a % of whole return mine expresses it as a % of profit.
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