That’s why I created this article on the keys to money management when betting on sports. Before we get into it, there are two things you need to come to grips with.
First, there is no such thing as a lock when betting on sports. This can be difficult for a lot of people to grasp. That’s because several amateurs blame their losses on games being fixed.
Second, you have to treat it like a long-term investment not a weekend trip to the casino. Investing on sports takes discipline and lots of it. You aren’t trying to hit the jackpot with one play. You instead are trying to find many small edges over a long period of time.
Invest Like the Professionals: Learn Expert Skills to Money Management
If you are someone who just throws money around on games with no method to your madness, chances are you aren’t collecting from the books. Instead, you are finding yourself reloading more and more.
I’m not saying it’s bad to do it for entertainment purposes. You can still do that with a disciplined approach that gives you a greater shot at profiting.
Basics: Starting Bankroll, Bet Size & Risk Tolerance
The first thing that you have to figure out is how big of a bankroll you have for sports betting. Once you have that, you can determine what your starting bet size will be. This is a balance between your expected win rate, the number of bets made, 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 be willing to risk in this situation?
I use the Kelly Criterion to determine how much I risk. The formula is as follows.
- “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.
- “q” is the probability of losing (1-p).
Seem complicated? Don’t worry. There is a Kelly Calculator that makes it easy.
Let’s say you have $10,000 in your bankroll to use on the random number generator. How much should you wager on the number being 1-55?
If you are getting even money back (1 to 1) and your probability of winning is 55% your ticket size would be $1,000.
Now, if you are betting on sports things change. That is because the odds you are getting are -110 (11/10) instead of +100 (1/1). While you still have the same 55% chance of winning you would only wager $550.
That is the full Kelly amount which would maximize risk and return. Want to reduce your risk? A common approach for gamblers is to use “half-Kelly” and risk half the recommended amount.
Bet Size Based on Expected Win Percentage
Here are some common win percentages with the percentage of your bankroll your wager size should be.
|Win %||Bet Size|
Top Sports Betting Strategies to Manage Your Money Long-Term
Flat Betting System
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 use a flat $100 per game you would be up $720.
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
If you want to take your game to the next level and maximize your earnings, you need to make a simple change. Instead of keeping the same wager, you can adjust each new bet based off your bankroll.
Whenever your bankroll increases, you make small increases in your bet size. At the same time, when you stack goes down, you decrease how much you wager. This allows you to compound your winnings when it’s going well and limit your losses when you are in a slump.
You simply re-calculate Kelly before placing each wager. 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 wager would be $577 to win $525. You win that one and your bankroll is now $11,025. Your next wager would be $606. However, if you lose you are now down to $10,419.
You would keep adjusting the amount before each bet you made until the end of the season.
Best Money Managment Tip – 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. There’s no avoiding them. 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.
However, 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.