How Much To Bet: How to Maximize Gains and Protect Your Bankroll
Many bettors can recognize value in a particular sports betting market, whether that be by ‘gut’ and ‘feel’ or the application of a statistical model to assess the probability of an outcome. But once the value has been identified, how much do you bet to make the most of that value while protecting your bankroll?
Betting Bankroll Management is one of the most important parts of being a successful punter.
Money Management and Betting Success
There are two essential characteristics to being a successful long-term sports bettor:
- The ability to recognize value in a given market.
- How to manage your betting bankroll.
In other words, how to optimize the identified value while minimizing risk.
In this article, we will discuss the most popular and successful sports betting money management strategies.
Bankroll Strategies
There are many and varied investment strategies that can and have been applied to sports betting, a number borrowed from the world of finance. Regardless, by the end of this article, it’s hoped even the most inexperienced of sports bettors will be familiar with the most popular betting bankroll management strategies and will have a better understanding of the fundamentals behind bankroll management.
What Is Your Betting Bankroll?
Essentially, your bankroll is the amount you’re willing to both risk and invest in your betting. You must start with a bankroll that will allow you to bet in a manner to see consistent growth. We recommend starting with a bankroll of at least 50 units, but preferably 100. Yes, this might mean that the amount you bet on each bet is small to begin with, especially if your starting bankroll is around £1000. But you’re in this for a long time, not a good time. Start slow and build. Patience is key.
How Much Should I Bet on Each Bet?
There are many and varied investment strategies that can and have been applied to sports gambling. By the end of this tutorial, it’s hoped even the most inexperienced of sports bettors will be familiar with the most popular money management strategies and will have a better understanding of the fundamentals behind money management.
A Constant Percentage of Your Bankroll
One strategy is to maintain a constant percentage of your bankroll with each bet. This method assumes that this will protect any gambler from losing their entire bankroll as the amount to be bet diminishes as your bankroll diminishes. However, this strategy fails to recognize value as a key part of a successful management strategy. It assumes equal value for each bet and equal odds being offered for each bet, which is rarely the practice case.
Taking the Odds into Consideration
This method is similar to the Constant Percentage strategy, except that it takes into account the odds being offered for a particular bet. For example, you bet 5% of a £1000 bankroll as a standard unit, £50. If betting on 2.00 odds, the unit remains £50, but when betting on an 11.00 outsider, that unit becomes £5.
Betting Bankroll Management – The Kelly Criterion
The Kelly Method, created in the mid-1950s, considers both the probability of a given outcome and the value of the odds offered about that probability. This value is referred to as the overlay. It suggests you bet more depending on how great the value is, but it also means you have to assess the probability of a given outcome with consistency.
Different Kinds of Kelly:
- Full Kelly: This method can be volatile, recommending potentially large bets based on the assessed value.
- Fractional Kelly: This is a conservative amendment to the Full Kelly method, where you bet a certain fraction of the recommended bet (e.g., Half Kelly, Quarter Kelly). It can be shown that a fractional Kelly method can return better long-term results than the Full Kelly method.
- Constant Kelly: Instead of recommending a percentage of a varying amount, it recommends a percentage of a constant amount.
Suggested Strategy: The Fractional Kelly Method
A 10% fractional Kelly method is often recommended to protect your overall bankroll while diversifying and placing many bets on sporting events. For example, if your bankroll is £5000, and you are betting on a team at odds of 2.60 to win with an assessed winning probability of 50%, the overlay is 30%. The recommended bet amount would be calculated as:
(bankroll×chosen fraction)×(overlay odds−1)(bankroll×chosen fraction)×(odds−1overlay)
(\£5000×10%)×(30%1.60)=(\£500)×(18.75%)=\£93.75(\£5000×10%)×(1.6030%)=(\£500)×(18.75%)=\£93.75
Conclusion
While many betting bankroll management strategies are available, the Fractional Kelly method is considered one of the best. It takes into consideration the odds on offer, the probability assessed of a team or player winning, and the resulting value identified to recommend a bet amount that will optimize that value without risking your bankroll and an early end to your career as a sports bettor.
