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BANKROLL AND MONEY MANAGEMENT

Bankroll and Money Management
by Website Staff

One of the biggest dilemna's facing sports bettors is how much to wager on a game or match. For most bettors flat betting a small percentage of their bankroll is the correct answer. Those who want to take sports betting to the next level may decide to use the Kelly formula to figure their wager size.

In most cases you should bet the same amount, one unit on every game however you may increase your wager size if your strong plays have shown to have a greater edge over multiple seasons. The problem is most gamblers do not have a statistically significant number of wagers to know if their strong plays will continue to show an increased edge.

Wagers that you have a strong feeling about may have no more chance of being correct then your normal bets. It is possible to have a winning record and still lose money if you vary the amount you wager. Therefore, we do not advocate increasing your wager size unless you use maths to calculate the edge on games you bet.

All sports bettors should set aside a bankroll for gambling. The size will be different for every person, but it should be less than the amount that will negatively affect your life style if lost. We recommend flat betting or risking no more than 4% of your bankroll per wager if you are betting for entertainment purposes.

If you are using sports betting as an investment vehicle we recommend flat betting or risking no more than 2% of your bankroll per wager. For example, if your bankroll is $10,000 your unit size will be $200. This is based on experience and the advice of veteran sports bettors.

Gamblers who want to maximize bankroll growth while reducing risk of ruin can calculate their optimal bet size using the Kelly formula.

In the following example the sportsbook has offered moneyline odds of -200 which equates to an implied probability of 66.7%. Meanwhile the handicapper has calculated that the same team has a 68% chance of winning. Plugging this information into the Kelly formula yields a wager equal to 4% of the bankroll.

A - Moneyline (Decimal Odds) = -200 (1.5)
B - Handicapper's Probability = 68%

Kelly Formula
= (((A-1)*B)-(1-B))/(A-1)
= (((1.5-1)*0.68)-(1-0.68))/(1.5-1) = 0.04 or 4%

For an explanation on how to convert a moneyline to decimal odds or a probability read Useful Sports Betting Calculations

Most experienced sports bettors will tell you that betting the Full Kelly amount will cause you to go bust in the long run. The Kelly Formula is only as good as the data used. Unfortunately, it is impossible to account for every variable meaning the sportsbook odds and the handicapper analyses are sometimes inaccurate. Therefore, it is inadvisable to bet more than half the amount calculated by the Kelly Formula or 2% of the bankroll in this example.

We have observed most Half Kelly wagers to be in the one to three percent range. If most of your bets are more than 3% using Half Kelly we recommend re-evaluating your handicapping methods.

Realistically if you manage to win more than you lose you are doing a good job. You must hit 52.4% just to breakeven versus a traditional -110 pointspread. Winning 55% of your bets on side and total wagers will give you a 5.5% return.

ROI
= (55 wins)-(45 losses)-(4.5 juice on losses) = 5.5 units.
= 5.5 units /100 games = .055 or 5.5%

Anybody claiming to do better is probably being insincere or hasn't been betting that long. The good news is that every time we wager on a game we know the result by the end of the day and we can churn a large amount of money in a short period of time.


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