Bankroll management is often an afterthought for recreational bettors, which is one of the many reasons their sports betting careers are short-lived or long, but immensely unprofitable. Profiting from sports betting is hard enough, even if players manage their bankroll correctly, but without proper bankroll management, even elite handicappers are doomed to fail.
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Money Is Your Tool
It’s funny the way that sports bettors and +EV gamblers in general look at money. When we go to work and perform a service, we’re paid for our labor in cash. As a sports bettor, we‘re also paid our winnings in the form of currency, but the difference lies in our tools of the trade.
Unlike most other forms of making a living or making money, in general, aside from poker and certain forms of advantage casino gambling – money is your means generate more wealth. Sports betting is the same.
Your sports betting bankroll is your lifeblood as a sports bettor. Without it, there is no money to be made. It’s like a construction worker showing up to do a job without his hammer and nails. If you’re a profitable bettor, putting yourself out of action due to being too aggressive with your wagers is the worst case scenario.
As sports bettors, we’re trying to win as much money as possible off the sportsbooks, but we have to be careful not to be too aggressive when it comes to risk. Managing risk means controlling our sports betting bankroll with some responsibility. The goal is to preserve our betting capital while steadily growing it (and taking some out for profits), and also to minimize the risk of ruin.
Percentage of Risk
It’s vital to realize that sports betting is a long term investment. On a single wager, our percentage advantage over a given sportsbook, even in extremely non-efficient markets, such as a stale or rogue lines isn’t gargantuan. Even where we have a definite and noticeable edge, the variance can still be brutal in the short term.
It’s over the long haul that we can punish the oddsmakers if we can consistently beat their odds.
One of the reasons that amateur bettors lose so quickly is not only because they are inexperienced, but because they have no bankroll management skills. They chase their losses or bet too much because they on a “hot streak”.
In reality, bettors shouldn’t be wagering more than 3% of their total bankroll on a particular wager. Even this is on the aggressive side. 1% would be on the conservative end, and 2% is a happy medium between the two.
We realize if you’re sitting down to read this, it might be a sobering revelation. These requirements mean that a bettor with a $10,000 bankroll shouldn’t be wagering more than $300 per game, at most. However, if you continually increase your bankroll on a weekly basis, you will be betting larger amounts before you know it.
Fixed or Variable
There is much discussion in the betting community about whether to bet a fixed amount on each bet or variable amount.
Using a fixed amount on each bet has its advantages. For one, it makes things simple. We place the same amount on each bet (after adjusting for bankroll growth or decline) and minimize our risk of ruin by keeping our bet sized at a fixed amount. This is probably the best route for new sports bettors.
A variable betting system centers on betting different amounts on each wagers depending on the edge or perceived edge of the bet in comparison to betting market. If done appropriately this the optimal way to go about betting sports, but bankroll fluctuations are more frequent.
Ideally, we can use Kelly Criterion to determine our edge on each bet, but this is often too complicated for some and tedious when it comes to certain markets, especially when time is of the essence.
If you can use Kelly Criterion to gauge the edge on your wagers accurately, that’s going to be the best route. But, for most bettors, we recommend a flat betting system or one that increases bet amounts in small increments when they grab a number where they think they have a larger edge.
When looking at posted records, bettors will almost always see gains listed as units. A bettor won’t say he’s up x amount of money during a particular season, but instead will use betting units for results.
If you’re flat betting, your betting unit will be a fixed amount that won’t change regardless of the play. This is also the same for variable betting, however. The unit size is a percentage of your bankroll and should be calculated based on your chosen betting system.
For instance, if you’re interested in a variable betting system, we suggest making it 1% percent of your bankroll. For smaller plays, you might bet 1% of your bankroll, medium size plays would be 2%, and your large stake plays would be 3%. Under this system, your 3 unit or 3% bets would be rare.
What bettors choose to use as their betting unit in terms of percentage of their bankroll is up to them. We stress that they consider the pros and cons of flat and variable, but once they make a decision regarding bankroll that they stick to their staking plan, provided they don’t find a plan that they considered to be more +EV.
It’s important to note that a moderate or significant favorite or underdog can throw a wrench into traditional bankroll management. Bettors will risk more on larger favorites and risk less when betting underdogs compared to -110 straight wagers.
Some bettors might risk the same amount on each, but this can undermine the value if your plays. When placing wagers, we suggest the to win amount for favorites and the amount wagered on underdogs be around the same.
For example, if you have a $10,000 bankroll, and you’re risking 1% on each wager, look to bet $100 on underdogs regardless of their odds. For favorites, and more specifically moneylines up to -200, we bet to win $100.
This might be too aggressive for some on both sides, but it offers an excellent balance between only betting “to win” the same amount and risking the same amount on each bet and offers potentially more value for both favorites and underdogs.
Establishing bankroll management is vital, but without accurate record keeping, bettors won’t know how much they’re winning or losing. They won’t be able to evaluate how well they’re doing at each particular sport or market as well. Tracking your bankroll is also clearly necessary for appropriate bet sizing.
Keeping track of your wins and losses can be as simple as putting documenting your wagers in a Word document or more appropriately plugging them into an Excel spreadsheet. There are several tools online available online that will track your bets with no charge.
Our favorite tool for this is Sharp Bet Tracker. Their service is free, and they allow bettors to break down their wagers based on the type of bet and sport. They also provide winning percentages, dollars earned, average amount won per bet and other statistics.
Recreational vs. Professional Bankroll Management
For those that bet for a living, their bankroll should be protected at all costs. If you are truly relying on sports betting if a large percentage of your income – your bankroll requirements should be on the low end.
Of course, those who are making substantial money on sports already know this. They protect their bankroll at all costs and even though they are typically betting more per day than most others, they are well within smart bankroll requirements.
As mentioned above, we encourage all sports bettors to view sports betting as a long term investment. Bankroll management is vital, regardless of if you’re betting for a living or recreationally for a side income.
If looking for market inefficiencies, line shopping and betting +EV markets, there’s no reason you can’t be on the aggressive side on bankroll requirements. Also, many bettors have their sportsbooks accounts funded with their bankroll, but they could add more if they had a bad run.
They might decide to adopt a 3% bankroll betting strategy with a $10,000 bankroll but could add more if they suffered massive losses. In essence, they have more bankroll on the side and can be a bit riskier when comes to bankroll requirements.
Determining your risk threshold, and if you’re willing to add any more funds if things go poorly is a crucial factor to considering when establishing bankroll requirements. Everyone has a different situation financially, which needs to be considered before they develop a bankroll management plan.
In the end, it pays to be on the conservative side. Sports betting is a game of cat and mouse between the sharp bettors, the wiseguys, and the sportsbooks. Tactics that worked ten years ago don’t work today, and determining your edge on some markets can be tough.
Establishing a bankroll strategy not only will protect yourself from going broke if you’re a profitable sports bettor, but it also allows you to more to time learn and see what’s working and what isn’t.
Remember, even the best sports bettors in the world can doom themselves with poor bankroll management. Their edge in betting markets is much higher than yours will likely ever become.