Sports Betting Money Management

Do you find yourself draining your sportsbook bankroll again and again, even if the percentage of bets you win is very high? If so, chances are that your biggest problem isn’t with the picks your making, but rather with money management.

It’s well known among poker players and casino gamblers that money management is critical to any winning strategy. However, many sports bettors fail to realize this, and neglect money management. However, in reality, managing your money is not only important, it’s absolutely critical if you want to show a profit in the long run. Failure to exercise proper money management often results in excessive bankroll swings, or even the sudden loss of your entire betting bankroll.

Basics of Money Management

The first key to bankroll management is to set aside money that’s specifically meant for sports betting. If you’re not interested in showing a long term profit or being a serious sports gambler, that’s fine; in that case, you can always just throw a few dollars into an online sportsbook account and make bets until you lose it. But for serious handicappers, having a dedicated bankroll is a must.

Having that bankroll is important for several reasons. First of all, you don’t want to end up dipping into money that is needed for bills or other expenses just to make a bet. In fact, you should absolutely make sure that you’re not betting with money you need to cover expenses or that is being saved for another purpose.

But the benefits of having a dedicated bankroll go beyond your own protection. It also gives you a baseline from which to gauge how large your bets should be on average, and ensures you always know exactly how much money you have to work with. Both of these are critical if you want to maintain a bankroll that never has to be replenished, whether you’re in the middle of a hot streak or you’ve fallen into a deep slump.

The Kelly Criterion

The most common way to manage a bankroll is to pick a percentage of your bankroll you’d like to wager on each bet. The optimal method of doing this is known as the Kelly Criterion. The idea behind the Kelly Criterion is to maximize the speed at which your bankroll will increase while keeping your risk of ruin (the danger of losing your entire bankroll) as low as possible.

Calculating your Kelly Criterion is not too difficult. First, when making a bet, take your chance of winning that bet and multiply it by the odds you’re receiving. Then, take that number and subtract your chance of losing the bet. Finally, take the result of that step and multiply it by the odds again. The number you get is the amount of your

Here’s a pretty simple example. Imagine you believe you have a 50% chance to win a money line bet that offers you 3-2 odds (+150). First, we multiple the chance of winning by the odds:

.5 * 1.5 = .75

Next, we take .75 and subtract our chance of losing – 50%, or .5.

.75 – .50 = .25

Finally, we divide .25 by 1.5 (the odds on the bet), and get .167, or 16.7%. This is the percentage of our bankroll we should bet on this particular game.

However, it’s probably best to bet less than what the Kelly Criterion says you should bet. This is mainly because we tend to overestimate our chances of winning any given bet. For instance, while you might think that you have a 50% chance of winning the bet in the above example, the odds are that your actual edge isn’t nearly that big. It’s best to play it safe and bet less than what the Kelly Criterion suggests. While betting too much can be disastrous and even lead to losing your whole bankroll, the worst that can happen from playing it safe is that your bankroll grows somewhat more slowly – and in bad times, it can be the difference between saving your bankroll and going broke.