There are no such things as locks in gambling.  Winning money isn’t about finding a couple sure things and betting big on them.

No, if you want to win money by betting on sports then you don’t just need to know how to bet or how to handicap games, you also need a firm grasp of money management.

Investing on sports take discipline, and lots of it because you’ll be trying to find many small edges over a long period of time.  I say “investing” because a sound handicapping approach, supplemented with good money management skills virtually takes the gambling out of sports betting.

Some of you might be thinking that winning 55% of your games is enough, you don’t need a money management system.  Well, you can still lose money even when you hit at a high rate.

Average Bet Size

The first thing that you have to figure out is how big of a bankroll you have for sports betting, and after that you can determine what your starting bet size will be.  This is a balance between your expected win rate, number of bets, and risk tolerance.

Just because you have an edge does not mean you want to double down your entire stack.  An easy way to look at it is like this.  Let’s say you have a random number generator that is equally likely to select any number from 1-100.  If the number is between 1-55 you win, if it’s 56-100 then you lose.  How much would you bet in this situation?

I use the Kelly Criterion to determine my bet sizes.  The formula for this is (b*p-q)/b where b is the net odds received on the wager, that is what you receive on top of getting your wager back, p is the probability of winning, and q is the probability of losing (1-p).

Seem complicated?  Don’t worry.  There is a Kelly Calculator that makes it easy.

For our example above let’s say you have $10,000 in your bankroll.  If you are getting even money back (1 to 1) and your probability of winning is 55% you should wager $1,000 of your bankroll that the random number generator will spit out a number between 1-55.

Now, if you are betting on sports with a 55% chance of winning with the same bankroll and same 55% probability of winning you would only wager $550.  That is because the odds you are getting are -110 (11/10) instead of +100 (1/1).

That is the full Kelly amount which would maximize both risk and return.  If you want to reduce your risk then a common approach for gamblers is to use “half-Kelly” and bet half the recommended amount.

Here are some common win percentages with the percentage of your bankroll your bet size should be.

Win %Bet Size

This even works when trying to decide what to wager on arbitrage bets (everything you can), trying to middle games, or hedging parlays.

Flat Betting Money Management Example

For most bettors I recommend they enter their bankroll, expected win percentage, and average odds of -110 to find the recommended bet size.  Then, take half of that and use it to flat bet each game during a season.

It keeps things easy and comfortable.

Let’s look at an example.  If you go 82-68 (54.67%) on the year and bet a flat $100 per game you would be up $720.

But, if you start out using a flat betting system, but after a great winning streak decide to vary your bets and increase them you could cost yourself.

Let’s say you start out the season going 60-40 (60%) at $100 per play, 60 X 100 = $6,000, minus 40 X 110 = $4,400, winning $1,600.

Then you decide to get greedy and up your bets to $200 per play in the hopes of winning even more money.

It is extremely unlikely for you to continue to hit 60% of your wagers long term. Let’s say you go 22-28 (44%) on your next 50 bets.  That would give you 22 * 200 = $4,400 on your winners and 28 * 220 = $6,160 on your losers for a total loss of $1,760.

For the season you are still 82-68 (54.67%), above the required win percentage (52.38%) to win money.  However, now you are down $160 on the year instead of being up $720!

This is why I recommend most bettors pick a unit value for the season and stick with it.

Kelly & The Power of Compounding Return

Now, if you are into sports betting for the long term and want to maximize your earnings you can compound your winnings by making small increases in your bets whenever your bankroll increases, and slightly dropping your wagers when your stack goes down.

You would basically re-calculate Kelly before placing each bet.  The swings are greater using Kelly, but the end return should be higher.

Let’s take a look at an example.  Let’s say you have that $10,000 bankroll and can hit 55%.  You are laying -110 on all of your bets instead of using a reduced juice sports book like 5Dimes.  You would start out wagering $550 per game.

You win your first bet.  Your bankroll is now $10,500 so your next bet would be $577 to win $525.  You win that one and your bankroll is now $11,025 and your next bet would be $606.  However, if you lose you are now down to $10,419.

You would keep adjusting the bet size before each bet you made until the end of the season.

Stay Patient

On paper, it is easy to see and understand, but doing it in the real world is much different. In all of my time spent in this industry, the number one thing I have learned is patience. It is a must. Without it you will crumble. You have got to have the will to sit through a losing streak, understanding that your handicapping is not flawed, that losing streaks happen to everyone. EVERYONE.

It’s important to remember that betting on sports is not a 50-yard dash, but a long distance race similar to the stock market.  You’ll see losing days, weeks, months and even years in the stock market, but if you look at the returns over each 20-year horizon it has always returned a positive profit.  You can do the same with your sports betting if you know how to manage your bankroll.