What is Bankroll Management in Sports Betting? How to Manage your Sports Betting Bankroll
Sports betting wages a war between persistence and resistance. Winning any war requires a supreme strategy to spark hot streaks, withstand cold spells, and ultimately, march forward in a positive direction. A successful sports bettor doesn’t need to graduate from West Point to achieve victory. Wise bettors deploy bankroll management: a not-so-secret weapon fitting anyone’s arsenal. Bankroll management encompasses how bettors use various strategies and profitable principles to guide their betting in order to protect and increase available betting funds while mitigating downside risk.
What is a Sports Betting Bankroll?
Most gamblers hear the term “bankroll” in poker. Whether rooting for aces in Las Vegas casinos or the WNBA’s Las Vegas Aces, a sports bankroll is the total number of personal funds available for betting. Sports bankrolls crucially differ from an overall/personal finance bankroll. Personal bankrolls build and replenish as services are rendered for pay, additional income streams start flowing, and costs are cut. The sole two options available for growing sports bankrolls are successful sports betting and transferring currently available money.
The Importance of Sports Betting Bankrolls and Bankroll Management
Cold streaks happen. When thick ice creates thin sports betting bankrolls, bettors dip into personal funds to reenter the game. Consequently, irresponsible betting amounts damage personal finances for real expenditures. Financial stress trickles into personal relationships and even overall mental health as well, making proper bankroll management a crucial element not only to success, but sports betting survival.
Sports Betting Bankroll Management Strategies
One of the biggest rules guiding the investment world is “never invest more than you’re comfortable losing.” Another time-tested rule is the sunk cost fallacy, stating that money that was spent and lost is gone and new money lives in new circumstances, so it’s futile to chase “getting your money back.” Sports betting relates closer to Hall of Fame Super Bowl champion Warren Sapp than Hall of Fame super investor Warren Buffet. However, heeding those two pieces of advice builds a crucial foundation for fruitful sports betting. Like obtaining sacks or stocks, there are numerous techniques to getting on the right bankroll management track.
Novice Bankroll Management Method: Flat Betting
Everyone desires to see the return on investment soar in concert with rapid heartbeats relieved over positive payouts. Flat betting fails to make hearts leap in joy, but it prevents utilizers from flatlining. Flat betting wagers no more than 5 percent of the bankroll per play. Conventional wisdom dictates 3 percent is a happy medium. Every play bets the same amount, no matter how confident the bettor is about winning.
For example, those starting with a $100 deposit should bet $3 per bet. This simple, steady strategy mitigates the huge losses many thrillseekers crash on (contrary to wishful belief, State Farm won’t gift those who bet on Mahomes’ Chiefs to defeat the Bengals with a “Patrick Price” reimbursement). Flat betting gains aren’t huge, but gambling isn’t a race. The slow-and-steady approach ensures those who stay disciplined and in the green cross the finish line with appreciably more money than they started with.
Novice Bankroll Management Method 2: Percentage Betting
Percentage betting embraces the same gambling grind. Instead of focusing on developing consistency with individual bets, percentage betting examines the overall bankroll. Percentage bettors are behooved to restrict betting between 2 and 10 percent of available funds on any given day. Most successful long-term bettors consider 10 percent the absolute maximum bet size. The carefulness mitigates losses and shields bankrolls from fluky upswings that promote overconfident overbetting.
Although percentage betting still provides some protection, it is not as strong as that of flat betting. However there is a bit more upside potential by allowing the bettor to place larger wagers when they are more confident in an outcome. Risk-averse novices select flat betting for its easy format and wide safety net. Percentage betting marks a favorable compromise for players entering the sports gambling game with relatively low experience, but high confidence on the games wagered on.
Consider a starting bankroll of $2,000. A player adhering to 10 percent spending evades spiraling under $10 until 30 consecutive losses. For perspective, the Cleveland Browns went 1-31 over the last two years preceding Baker Mayfield. The team found a new quarterback and the bettor needs to find a new hobby if loss records sink that low.
Intermediate Bankroll Management Method: Unit Scale
The third method isn’t as beginner-friendly as the first two. However, it charms those specializing in a particular sport. The classic betting method of assigning quantifiable confidence levels to a pick (usually on a scale of 1 through 5 or 1 through 10) and betting accordingly. The name of this gambling game is unit scale. For example, if an initial deposit is $1000, then $50 should be the maximum bet. If that bettor’s confidence scale for an event is 10 units and the biggest wager is $50, the next step is dividing $50 by 10 to determine other unit sizes. If the unit scale is at five, simply divide the $50 by five.
Defining a maximum bet based on win confidence and dividing that number into units mandates more work than following fixed amounts or changing fixed numbers into varying percentages of your bankroll. Harder work pays off handsomely for bettors leveraging a deep understanding of the game and/or event being bet on, even more so than percentage betting. Additionally, unit scale equips users with more customized control over the process of making a sound betting decision, especially when considering how much to wager on a specific event.
Advanced Bankroll Management Method: Kelly Criterion Model
The Kelly Criterion Model advances unit betting to the next level. The Kelly criterion model works off a precise winning percentage. That number plugs into a formula to determine how much of the bankroll should go into the wager.
The formula is (Decimal odds of the wager * win probability – loss probability) / decimal odds of the wager = suggested wager percentage.
That algebra appears intimidating to the faint of numerical heart, but what looks like college algebra behaves pretty elementary. Because betting odds have associated probability, we can use that to help calculate our suggested wager.
For example, a bet placed at -122 odds has an implied probability of 55 percent. Calculating the result: (0.91*.55-.45)/0.91= 0.055. The numbers translate to the Kelly criterion model recommending a wager of 5.5 percent of the bettor’s total sports betting bankroll.
The recommended bankroll percentage escalates quickly when using the Kelly criterion model, requiring high precision in winning outcome confidence, the highest of all methods mentioned. Many professional sports bettors lower the bankroll stakes by using half or a quarter of the suggested bankroll wager. This is called their Kelly Criterion Number. The adjustment still bests the upside of traditional flat betting or percentage betting models and mitigates some downsides. Regardless of the sports betting method, everyone should track bets to analyze performance patterns for improvement and proper gain/loss monitoring. OddsJam provides a free bet tracker across all sportsbooks. Excel spreadsheets suffice as well.