Exchange Deduction Factors
Traditional bookmakers generally apply reduction factors
in accordance with Tattersalls Rule
4c when a non runner is declared.
Betting exchanges however work slightly differently.
As exchanges do not conform to traditional pricing
odds bands, and also because price at time at withdrawal
is a little hard to determine ( eg is the price at withdrawal
the £2 at max odds or the £1000 a notch
or two down?) the exchanges use their own calculation
to determine the reduction factor to be applied to previously
matched exchange bets.
Generally clicking on each horse will bring up details
including what deduction factor will be applied to previously
matched bets on other horses in the event of it being
One important point to note is the difference between
how betfair applies it reductions compared to rule 4.
Rule 4 is normally applied as a percentage deduction
Betfair however applies it as a percentage deduction
from total return when looking at win markets.
eg if you have made a bet at digital odds of £100
at 11 (ie traditional 10/1) and a non runner with a
deduction factor of 10% is declared, the net digital
odds payout will be 11 * 0.9 = 9.9
ie you get returned including your stake £990
The key difference here between Rule 4 c is that the
deduction is applied not to odds but to return.