Bankroll Management
March 16, 2018 at 12:04 pm
Winning plays are only half the story for successful sports wagering. You also need to keep your emotions in check. And you need a framework to grow your capital while keeping your downside exposure under control.
Kelly Criterion
Many are familiar with the Kelly Criterion. It was developed by John Kelly, a Bell Labs engineer in the 1950s, for dealing with signal noise issues. Since then, it has been adopted by professional blackjack players and others to maximize the expected growth of their bankroll.
Wagering Percentage
Kelly tells you to wager an amount equal to your advantage. For example, if your ROI per wager is 10%, then that would be the percentage of bankroll you bet on each play according to Kelly. A fraction of this amount (often 50%) is usually wagered to reduce bankroll volatility and account for errors in estimating your advantage. We wager conservatively with 2 to 4% of our bankroll on each play. Here is a calculator to help you determine bet sizing when you have multiple plays.