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Bankroll Management in Sports Betting

Kelly Criterion

The average bettor loses his money to the bookmakers, mostly, as a result of bad bankroll management

The bookmakers can, from time to time, present very good odds, especially if they have been having some good weeks (usually weeks with a lot of upsets, many favorites losing, etc.) and the bettors’ bankrolls have been getting punished.

The bookmakers know that if they present some good odds(I mean some almost unbelievable odds), the average bettor will most likely deposit into their account again, and maybe even win some money, therefore increasing his bankroll.

For the bookmaker this is not a problem at all, because they know that in a few weeks the customers will be on a low bankroll again due to bad bankroll management. The bookmaker will see this small term loss as a long term investment, since the average bettor will get excited with his winnings, and then get greedy and start to bet more and with too much money. Inevitably the bookmaker will get their money back, and will even profit from the investment.

The professional or experienced bettors know that the bookmakers operate in this fashion; They present very good odds sometimes, to get the money flowing and to leave the clients confident, but then the money eventually returns to them, due to the mistakes made by the average bettors. So the experienced bettors know when to be patient and wait for the better opportunities.

The professional bettor doesn’t get carried away by the excitement of a winning streak. He knows what to expect and acts accordingly. The experienced bettor isn’t necessarily better at predicting the outcome of an event than any other, but he is much better at managing his bankroll.

There are 3 management systems that are widely known and used by the bettors: Martingale, “Row of Numbers” and Kelly Criterion. These systems can also be known by different names but the function should be the same, whatever that name is.


Martingale is probably the most widely known bankroll management system. It was originally created in order to be applied in casinos, since it isn’t about predicting results. This system is all about controlling your stakes. With Martingale, you can be a terrible bettor, but still win money. However, Martingale is a system with a high risk of leading to bankruptcy.

The main principle behind the Martingale is:

If you lose, you will double your stake, and if you win, you should start over from the original


stake. That means that eventually you will ensure a profit. Let’s see this example: You found an event with 2.0 odds for a home win. You have placed 100€ but the bet is lost because the game ended in a draw. Next time you will bet 200€ on 2.0 odds again.

If you lose this one, you will have to bet 400€ on 2.0 odds again the next time. If you win that time, you have used a total stake of 700€ (100+200+400) and you have profited 100€. The 100€ profit will be the same as if you had won your first bet.

Fantastic system, or not?

Certainly, if you have unlimited funds available. Or if the bookmaker increases their bet limit. Or if you are calm enough to deal with a long term losing streak. Remember that at 2.0 odds, you would have to bet 32x your initial stake in case you lost your first 5 bets in a row. And losing 5 in a row with 2.0 odds isn’t that hard… And even if you have lost 5 times in a row, there is no way to ensure you would win the 6th bet. Your chances would be exactly the same as the last 5.

A lot of people think that they will have to win sooner or later when they are on a losing streak. But the fact is, the chances of winning are exactly the same as they were when the first bet was placed. To summarize, Martingale is a very dangerous system and should be used by bettors with a large bankroll and nerves of steel. In my opinion, Martingale is not a good system for the average bettor, due to the high level of progression.

Row of Numbers

The German word for this system is “Die Abstreichmetode”. This is also a very known casino system, and has a lot in common with Martingale (recovering from losses by increasing the stakes). But in this case, Row of Number is not so tough as Martingale. While Martingale can rapidly get you the stakes back, along with some profit, Row of Number is slower and doesn’t recover from losses so quickly. On the bright side, it also doesn’t lead you into betting huge stakes (like Martingale does).

The Row of Numbers gives more flexibility when compared to Martingale, since you can adjust the bets more accordingly. The disadvantage of this system is that it requires a bigger effort, since you have to make a sequence of numbers on a piece of paper or write it down somewhere and then add numbers when you lose and remove numbers when you win. That means you need to have a better control over the bets you make.

Let’s better explain this system then:

First you need to decide how much you want to win, 1000€ for example. Then you need to calculate how much time it will take to reach your goal. This is the tricky part, because when you win, you will have to remove the first and the last numbers on the row, but when you lose, you should add one number to the row.

As a result, you need to estimate your average chance of winning, considering a certain odd. If you want to bet on average odds of 2.0, you should define the chance of winning to 40% (or something around that). It is always better to underestimate than overestimate your abilities. If you overestimate your ability, your stakes will increase and that can be really unpleasant in case you face a losing streak.

If we imagine the 1000€ split into 20 wins of 50€ each, we can determine how much you will have to bet in order to reach a total profit of 1000€, considering the 40% chance of winning with odds of 2.0 (if you won 50% of the bets, you would be even with the bookmaker).

With 40% chance of correctly predicting the result and with average odds of 2.0, you will lose 60% of your predictions. That way, you lose 50% more than what you win (60/40). In case you win, remove 2 numbers from the row (the 1st and the last). When you lose, you should add a number on the end of the list. If we schematize this row of numbers, it would be something like this:

50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

Defining your initial stake:

Cas we explained above, the 1st and last number will be removed if you win. 50+50 = 100. In order to win 100€, you will have to use a stake that will give 100€ of net profit. If the offered odds are 2.0, you have to bet 100€. If the odd is 1.50, you have to bet 200€. If the odd is 1.75, you have to bet 133,33€. The way to determine your stake is:
Net Winnings
Odds – 1
The stakes for next bets can be calculated in the same way. If the first bet is 125€ at 1.8 odds and you lose this bet, you must add 125 at the end of the row. The next bet should then be, the 1st and last numbers in the row, which are now 50+125, divided by (odds-1)

50 +125
Odds – 1
Now all you’ve got to do is replace “odds” by the real odds offered for your prediction. If you win, you then remove the 1st and last number in the row and continue with 50+50 / (odds-1).
Even if this system doesn’t produce a level of progression as high or fast as the Martingale, it is still a pretty dangerous system. If you face a losing streak, things can quickly get out of hand. So, the pre-betting math is very important. Before you begin using this system, do a test with imaginary stakes for a month or something. You will learn the system and understand the importance of not being overconfident in your own ability of predicting outcomes.

Kelly Criterion

Systems like Martingale and Row of Numbers use a high level of progression to compensate the lack of margins of the bettor. In these systems, the stakes are increased successively when you lose and, this way, the bettor has a high chance of going bankrupt (losing his bankroll).

With Kelly Criterion, the progression increases if you are winning, and decreases when you are losing. The stakes are set by a percentage of your bankroll. With Kelly criterion the risk of bankruptcy is minimal. This requires that the bettor has the odds in his favor. By using this system, it is expected that the bettor can beat the bookmaker, or at least break even. If a home win has odds of 2.0, you will only bet on it in case you think the odds of that outcome are 50% or higher.

The Kelly Criterion were first described by John L Kelly, who invented this theory and respective formula.

To summarize, the Kelly theory states that if you can somehow determine the correct probability for a certain outcome of a certain event, then the formula will determine the exact stake you should use in that same event.

Kelly Criterion

If you overestimate your ability to predict an outcome (that is, predicting a 60% chance when the real chance is 52%), you will pay for that, and you will lose money. If you underestimate your ability to predict the outcome (ie, predicting a 55% chance, when the real chances are 60%), you will win money, but not as much as if you were using fixed stakes.

This is because the Kelly formula optimizes the stake considering you can predict the outcome with a high grade of accuracy. With Kelly you win money, even with the slightest edge over every game you pick. If instead of that, you have a slight disadvantage in every game you pick (ie, overestimating your ability to predict), you will lose money in comparison to using fixed stakes.

Before beginning to use the Kelly Criterion, you should consider the following:

Bankroll size

A bankroll 10-15 times the size of your stake should be enough. Of course these funds should be money that you can afford to lose. Remember that with the Kelly system, you won’t lose your money straight away, since the stake is set according to your current bankroll size.

How many times, and how good are you at picking value bets

The experience is very important in the art of sports betting.

Choosing value bets correctly, and frequently enough, is obviously the hard part. Only with enough experience you can become an intelligent bettor. The bookmakers don’t offer much value bets, so you have to look around several bookmakers and look for big differences and for the best odds. When there are big differences, that means that the bookmakers have different opinions about the correct odds of the event.

Use comparison websites to compare the odds between several bookmakers. They rarely offer many value bets during the same week. Don’t expect to find value in more than 2/3 events in the same week. When you think you find value odds, you need to analyze the event carefully. If the presented odds are 2.0, the team SHOULD have more than 50% chance of winning, since the stake size is directly proportional to the chance of winning (which is your judgement).

Project duration

For how long will you continue to use this system?

If you have defined a goal for your winnings, the project ends when the previously set goal is reached, and then you can start over again. This way you start to understand how to win money and you boost your morale and discipline. If you haven’t set a goal, when you hit 100% profit (i.e. double your bankroll), you should withdraw and start over with only the initial bankroll..

Remember that when your money is on your bookmaker’s balance, it’s the bookmaker’s money, not yours. So what’s the point of winning money, if you don’t get to spend it in whatever way you desire? Because of that I strongly advise to restart the bankroll on a previous set amount once you reach your goal. Turn your winnings and effort into something, don’t let them stay there in your bookmaker’s balance, because that way there’s always a small chance you’ll lose it.

Let’s analyze this system a little bit better:

The big advantage of the Kelly Criterion is that you will lose less money when your bankroll is low. This is mainly due to the fact that your next stake will always be a portion of your current bankroll. When your bankroll size is small, then the stake is also small. If your average stake is 10% of your bankroll, then you can lose 6 times in a row and still have about 48% of the initial bankroll at your disposal (take 0.9 and multiply it by itself 6 times).

We’ll not bore you with advanced statistics, but if the odds are on our side (betting with a 10% edge over the bookmaker each time), the chance of losing 10 times in a row (with odds of 2.0) is 1/3000 !!! The Kelly system isn’t a system that allows for quick swings in our balance. With Kelly, you win by having the small required margin, the 5%extra on each match.

If the margin is on our side, Kelly will increase the stakes. If you lose, the stakes will decrease. As a result, there won’t be huge swings in your account. Kelly is a good system for bettors that bet not only for money but for the satisfaction of winning, and being correct in their prediction.


If you are a bettor with an high risk profile (you like to gamble) and you know that you rarely predict with more accuracy than the bookmaker, then Martingale or Row of Numbers can be the ideal bankroll management system for you. But beware of the danger these systems represent. The progression rate can be devastating and ruin the project very early.

If you have a low risk profile (you consider betting as an investment with a little bit more risk than the stock market) and you know that you can predict a bit better than the bookmakers, then Kelly is your system. Kelly is the professional bettor’s system, a system for bettors that seek perfection. A system that optimizes your stakes if, and only if, you can predict better than your “enemy”, namely, the bookmakers.

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