Bankroll management may not be one of the hottest topics in online sports betting, but it’s very important for a punter to ace it if they wish to be a professional sports bettor.
The winning margins in the industry are slim. With the break-even points at 54.3% and the standard -111 vig, winning over 55–60% of the games you bet on is nearly impossible.
Many beginners in the industry have no real plan to manage their bankroll. They just want to set aside some money and head to the best online sportsbooks in the US.
Here’s our ultimate bankroll management guide for sports betting:
What is bankroll management?
Bankroll doesn’t refer to the amount of money you’re looking to bet in the next few weeks or on your weekend games, it’s the total amount of money that’s present in your bank account that you’re going to use for betting on games in a lifetime.
When the amount reaches a milestone (or matures), you’ll withdraw nothing from it except the profits. The idea of having a bankroll is to perceive it as a long-term account.
You don’t open a bankroll every week or every month. You only have one account that you’re going to use for the rest of your online sports betting career.
While you may add and withdraw money from it as needed, it’s the only account that you’ll be using for every betting purpose.
You must ensure that your bankroll account is isolated and not linked to any of your other accounts like your savings account or any other funds.
Why bankroll management is crucial?
So, what are the three things you need to make a sports bet? You need money (of course), you need somewhere to place a sports bet, and you need to pick on who you think is going to win. If you don’t have money, what good are the other two?
Bankroll management is a check and balance system that ensure you’re always in the game.
If you ignore this practice, you’ll be left on the sidelines and your money will be going down the drain. But what if you’re the number one sports bettor in the world? Does this apply to you?
Hundred percent. Some elite punters (we’re talking the best of the best) are only winning a small number of percentage points. This means, as you might imagine, they’re losing most of their sports bets.
A lot of them are not winning most of their sports bets, which means if they aren’t managing their bankroll the right way (cough, cough, bankroll management, cough), they won’t have sufficient money to realize their skill.
Yes, you can still make money with a losing online sports betting record. If you’re finding it difficult to understand this concept, you’re way too inexperienced to be doing this for a living.
Remember, there’s going to be a certain variance in online sports betting. Even some of the best bettors on the planet can lose their first few sports bets — no one is perfect.
If you don’t work on bankroll management, a bad streak of variance will be enough to sideline you permanently.
An added benefit
Having laser-focused bankroll management offer a ton of benefits. For some of you that bet on sports, you catch a fair bit of flak from your family and friends.
They try to paint you as some degenerate bettor with no rational reasoning behind what you’re doing, thus giving you a hard time about your online sports betting.
When you have a robust bankroll management plan, you can fend off these negative Nancies.
It’s an incredible way of displaying that you’re serious about your craft. If someone inquires about the strategy of your online sports betting and you reply that you just bet random amounts of money on sports that you think you have a prediction on, they’re definitely going to think you’re a pitiful degenerate who is just riding on their luck.
However, if you lay out a mathematical, well-crafted approach that you use to place sports bets, you suddenly look very smart.
If people think that you’re putting real expertise and thought into your craft, they’ll start taking you a lot more seriously.
How to manage your first $100 bankroll?
First, select a bookie from Betting Sites Ranking and make your first deposit as a professional punter. It doesn’t matter if you have already made and lost a few sports bets. Follow the steps mentioned below:
- Start from scratch and kickstart your bankroll management from zero.
- Sometimes, switching bookies is beneficial; a fresh start on a new online sports bettingsite can help you make rational sports bets. The reviews at Betting Sites Ranking can help you choose a good betting site in the US, UK, or almost any other country.
- Complete your first deposit and divide it into units.
- Place your wagers according to the Kelly Criterion if you want to be conservative. Use 20% of the Full Criterion.
- Increase to Half or Full Kelly once your online sports betting skill improves.
While $100 may seem a small amount, it can be a decent starting point to test your online sports betting strategy.
You can make small sports bets too, there’s no restriction. If you can make a consistent return with a bankroll of $100, you can do the same for $10,000 or even $100,000.
Keep monitoring your progress and stay smart. Congrats, you’re slowly becoming a professional punter.
How much money do you need for online sports betting?
Generally, $100 is a good starting point — a good round number, which you can easily divide into percentages or units.
You can look at it as a percentage of your monthly salary. If you deduct the monthly taxes, $100 would be around 5% of your monthly salary.
If you earn more, you may obviously start a tad higher. But most people can miss around 5% to 10% of their monthly salary, without living uncomfortably or going broke.
How much should I bet?
Choosing how much to bet depends on a plethora of things. Deciding how much to spend on your bankroll means you must reflect on a variety of important questions, like:
How much knowledge do you have about the sports you’ll be betting on?
How familiar are you with the sport you’ll be betting on? Can you objectively predict what will happen in a particular event? Can you do it better than the bookies? Are you a sports analyst or a sports fan (both are different)? Ensure you know your sport well.
How much money can you spare?
How much money do you earn and how much of it you can afford to miss? When starting a bankroll, you must ensure that you’re not gambling money you can’t afford to lose.
If, for example, you’re betting with the money you’ll need to pay your bills or rent, stop — it’s not a good idea. Bet an amount you can afford to miss and be realistic.
How much experience do you have in online sports betting?
There’s no doubt that experienced bettors have a bigger bankroll than a beginner. Professional gamblers have bankrolls starting from $50,000. However, we recommend that you start small.
Don’t commit a significant portion of your salary before answering these questions.
Advanced bankroll management strategies
Various advanced bankroll management strategies can offer you a decent indication of how much you should bet in a particular scenario. These depend on your win streak and the value of your sports bets.
Kelly Criterion is one of the most scientific of these, while the Fibonacci Method and Level Staking are also very common. We’ll discuss each of these in detail:
The Kelly Criterion
The Kelly Criterion is a popular method that was proposed in 1956 by a researcher at Bell Labs.
Basically, it’s a mathematical formula that offers an indication of how much should be bet, considering the probability of an event happening versus the sports betting odds offered on it.
According to the theory, you should bet a greater percentage of your bankroll according to value.
In its most basic form, this method looks like this:
A = (Your Chance) * 2
B = A – 1
The answer to ‘B’ is your optimal wager size (relative to your total bankroll)
For instance, if a sports bet has an 80% chance to win, it has a probability of 0.80. Multiply 0.80 by 2 and you have 1.60. Now, subtract 1 from 1.60 and you have 0.6, or 60% of your total available funds as your optimal wager.
Of course, you have to consider the real sports betting odds of something happening versus the sports betting odds of the bookies.
For simple sports bets with two outcomes, the Kelly Criterion provides the following formula:
f* = ( ( p ( b + 1 ) ) – 1 ) / b
- p is the probability of winning (this is your estimate when betting on sports)
- b is the net sports betting odds you can get for your sports bet, expressed in decimals (for example, if the odds are 1.3, 0.3 will be the net odds)
- f* is a fraction of your bankroll you should bet
Here’s an example of the Kelly Criterion:
A betting site provides 1 to 1 odds (2.0) on a bet: b = 1. You estimate the sports betting odds of your outcome at 60%: p = 0.60. Now, plug these values into the formula:
f* = ( ( 0.60 ( 1 + 1 ) ) – 1 ) / 1 = 0.20
In this example, you should bet 20% of your bankroll.
If you’re not good at mathematics, you can also use the online Kelly Criterion Calculator. Give it a try, using it is quite easy.
Tip: Don’t bet on sports bets with negative (or no) value!
If you do the calculation using a negative value, you’ll get a negative amount, recommending that you don’t bet.
Finding that value is up to you. Yes, the Kelly Criterion method has received criticism, but it has still stood the test of time.
Plus, a lot depends on your assessment of value. By providing extremely accurate sports odds, bookmakers are always looking to eliminate value.
Of course, there are a variety of factors that may influence these sports odds, like overestimation of certain injuries, popularity, athletes, and more, or money coming in that moves the lines.
Still, you must assume that bookies are very clever and understand why they’re publishing certain odds. You’ll have to do something different to outsmart them.
There are various kinds of Kelly Criterion: while some are bearish, others are more bullish:
- The Constant Kelly:There’s not much difference between the Full Kelly method and the Constant Kelly method. However, instead of wagering your total bankroll, you have to wager a percentage of a fixed amount. This is one of the best ways of managing your funds if you don’t have a fixed bankroll but have regular funds you wish to bet with. For instance, you bet 14.3% of a fixed amount, rather than betting 14.3% of your bankroll.
- The Quarter Kelly, Half Kelly, or Fractional Kelly:You can choose the Fractional Kelly if you want to be more conservative in your approach. Using this approach, you can make the Kelly Calculation and use some of it instead of the Full Kelly. Use 25%, 33%, or 50% of the Full Kelly, or any percentage with which you’re comfortable. This strategy will be more beneficial since you won’t risk much of your bankroll.
- The Full Kelly:The Full Kelly Criterion has already been discussed in detail. However, it can be risky if you follow it consistently. If your estimated value is extremely high, it can suggest that you bet up to half of your bankroll. Still, if you’re right, a decent win streak can have you winning fast and big. It all depends on how accurately you estimate value. For instance, with your estimated overlay at 20%, your bankroll at $20, and sports odds at 2.4, the Fully Kelly recommends that you bet 14.3% of your bankroll, which comes out as $14.3.
Level Staking
This form of bankroll management is quite simple. In this method, all you need to do is bet a fixed percentage of your bankroll. If you have a continued win streak, you gradually increase the percentage.
However, you decrease your stake if you run into a losing streak. This ensures you’re always in control of how much you’re betting.
Although Level Staking isn’t as advanced as other methods, it’s easy to understand and best for bettors who like to keep things simple.
This strategy is more about staying sharp and keeping mental discipline — unlike the Kelly Criterion, which is a scientific method. Our recommendation is, to use this method with a Fractional Kelly for best results.
You may begin with a Quarter Kelly and gradually move your way up to a Half or even a Full Kelly.
The Fibonacci Method
This is a bankroll management method that is based on the Fibonacci sequence that was proposed by a genius mathematician in the 12th century.
A Fibonacci sequence starts with the numbers 1 and 2 — every number is the sum of the previous two numbers.
The Fibonacci Sequence: 1, 2, 3, 5, 8, 13, 21, 34, …
Computing the sequence and using it to bet is pretty straightforward. Starting with an initial bet size of ‘1,’ you move to the next step each time you win. However, you move down two steps every time you lose. For instance:
- Your first bet is $100
- You win your bet
- Your next bet is $200
- You win your bet
- Your next bet is $300
- You win your bet
- Your next bet is $500
- You lose your bet
- Your next bet is $200 again
Keep in mind that this betting strategy can be risky, especially since it doesn’t consider the value or sports odds. However, if you’re on a significant win streak, it can be a pretty dynamic way to build your bankroll.
You can combine this with the Fractional Kelly if you don’t want to take much risk. For instance, begin with 10% of a Full Kelly, and move to 20%, to 30%, to 50%, and so on.
How much should I bet on every bet?
There are two main strategies when it comes to choosing how much of your bankroll should you risk on every bet. Most punters use either units or a constant percentage — each technique has its own benefits:
Units
Many punters bet in units. This means you’ll have approximately the same amount for every bet. Dividing your bankroll into 50 or 100 units will be your best bet. If you have a bankroll of $1,000, you’ll have units of $10 or $20 per bet.
However, since you’ll be making small sports bets instead of big ones, you’ll have to remain patient because it’ll take some time for you to start earning money.
But remember, you’re not here to only enjoy, you’re here to make money as well. So, focus on the long term.
A Constant Percentage
Most professional bettors will bet a certain percentage of their bankroll consistently. A decent percentage could be anywhere between 1% and 3% of your total bankroll. This has a definite advantage.
When your bankroll grows, so will your sports bets (organically, in size). If you lose, you may make smaller sports bets until you resume your win streak. This is one of the best ways to ensure you never go broke.
But don’t be too flexible. While both the strategies mentioned above (percentages or units) allow for some flexibility, don’t become too flexible.
You can choose a higher percentage or choose to bet double or triple units on a particular event.
However, our recommendation is, never to use more than 3x your normal percentage or unit for any sports bet. A systematic approach pays off in the long run — always!
How to improve your bankroll management?
Keep it Separate
You need to keep your online sports betting money separate from your everyday money allocated for rent, bills, and food. This will prevent you from overspending on betting sites when you’re emotional.
Track Your Bets
Another thing you need to do is keep track of your bets, no matter small or big. By monitoring your bets, you’ll be able to analyze your losses and wins and avoid repeating the same mistakes.
Betting Value
Although it’s easy to place bets that allow easy wins, you would only be able to win small amounts. Instead, try to place bets on odds with greater value. The bigger the risk, the higher the amount.
Consistency
While betting on any sports, having a consistent approach is necessary. Research and gain as much information as you can to familiarize yourself with the market trends and reduce the chances of losing money.
Flat Betting
This is an easy way to place bets and is recommended for beginners. In the flat betting model, bettors only allocate one unit size for every bet. The betting odds and the bettor’s confidence wouldn’t affect anything.
Setting Limits
It’s easy to lose your self-control while betting. This leads to bettors losing their bankroll in a matter of minutes. Make sure you set a limit and implement it when it’s time, regardless of how badly you want to continue.
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