It’s just as essential, if not more, how you gamble than who you bet on. In this article, we evaluate the strengths and weaknesses of five different popular sports betting money management methods.
Many a sports bettor has chosen victories against the spread at a 55% or greater rate, only to lose money due to poor money management.
There are various theories about how to make the most money betting on sports.
Pro: Every time you win a wager, your cash nearly doubles.
Con: When you lose a wager, your bankroll is depleted, and you no longer have the opportunity to apply your advantage.
When you choose the all-in strategy, you risk your whole bankroll on each bet. You’ll obviously make a lot more money on a winning wager than if you merely risked 5% of your bankroll. However, if you lose a bet, you will lose all of your money.
Even if you can correctly predict winners 60% of the time, you’ll only endure a few bets before losing one and losing your entire bankroll.
It’s tempting to go all-in every now and again, either when things aren’t going well or when you’re particularly fond of a wager. However, it is an extremely dangerous procedure. You’ll virtually certainly do it again if you’ve done it once. And you’ll lose it all one of these times.
Pros: It’s conservative enough that if you have a stable edge over time, you’re unlikely to lose your entire bankroll.
Cons: Your bankroll will grow in little increments, needing a lot of patience.
Fixed wagering entails risking the same amount on each wager, regardless of previous wins or losses. The risk amount is usually calculated on a proportion of your initial bankroll, usually between 2% and 3%.
With fixed wagering, you won’t be tempted to “push your luck” and lose a lot of money on a single bad bet, or to try to make up for a recent losing streak.
However, it will take a long time for your bankroll to expand significantly. After 100 bets risking 1% of your beginning bankroll and a 55% win rate against the spread, your bankroll would only rise by roughly 10%.
Pro: You can often swiftly recover from losing bets by doubling the size of your next wager(s).
Cons: Losing streaks are unavoidable, therefore you’ll have to bet a lot of money to make up for them, eventually depleting your bankroll.
The Martingale strategy is used in blackjack and other games or bets that have a 50/50 chance of winning which is why it is also one of the most popular sports betting systems. You can gradually increase your bankroll by doubling your wager after each loss, as long as you don’t have any long losing streaks.
If you lose a $10 bet, you’ll have to risk $20 on your next gamble. If you lose, you’ll have to risk $40, then $80, $160, $320, and so on. When you finally win, you’ll go back to your previous stake size, with a bankroll that’s roughly the same as it was before the losing streak began.
Unfortunately, if you play long enough, you will have losing streaks. If you flipped a coin 1,000 times, you’d certainly get stretches where the coin landed on heads 10 times in a row or tails 10 times in a row. If you double your bet ten times in a row, you’ll find yourself risking an uncomfortably large sum just to break even – assuming you don’t first exceed the sportsbook limit or the amount of money in your bankroll.
Pro: A progressive approach that allows you to swiftly recover losses while remaining more conservative than the Martingale.
Con: Reducing your risk during losing streaks can reduce your chances of winning.
Rather than doubling your bet after each subsequent loss like the Martingale approach, the Fibonacci strategy just tries to recuperate what you lost on your previous two bets. You return to your previous wager size as soon as you win a wager.
You would place a wager of 10-10-20-30-50-80-130-210-340 instead of 10-20-40-80-160-320-640.
As you can see, the Fibonacci method requires 8 consecutive losing bets to achieve $340, whereas the Martingale system requires only 5 consecutive losing bets to reach $320.
However, if you won your ninth bet after losing your first eight, you’d still be losing (you’d have earned 340, which would have covered your previous two losses, but what about the first six?) Recovering that money and getting back to where you started would obviously take some time.
PROPORTIONAL (AKA KELLY CRITERION)
Pro: Considered to be the most profitable system over the long run.
Con: Its aggressive character makes it potentially volatile, and your drive for maximum growth may be overshadowed by your financial limits. You must also be able to calculate your edge on each wager precisely.
The Kelly Criterion’s primary idea is that the size of your stake should be proportional to the edge you hold on that gamble. Your funds will expand enormously in this manner.
The Kelly Criterion is calculated as follows: (Odds x Probability of Winning – Probability of Failure) / 1.
Let’s imagine you’re wagering +100 on the Toronto Maple Leafs. The Leafs have a 55% chance of winning the game, according to your calculations, thus they should be priced at -120 odds.
This is (10.55-0.45) / 1 = 0.1.
In this situation, the Kelly Criterion suggests that you stake 10% of your bankroll.
Let’s imagine you’re placing a -1.5 +220 wager on the Pittsburgh Penguins. The Penguins have a 33% chance of winning this wager, according to your calculations, thus they should be placed at +200 odds.
(2.20.33-0.67) / 1 = 0.056 is the result.
The Kelly Criterion suggests that you bet 5.6% of your bankroll in this scenario.
Popular Sports Betting Money Management Systems Conclusion
When people think of sports betting, they usually focus on the game and player matchups. But it is just as important how you manage your money! The five different popular sports betting methods for managing your bets that we have discussed in this article are all unique but have their own strengths and weaknesses. Now that you know more about these options, it should be easier to choose which method is best for you. Have any of these methods piqued your interest? If so, contact us today with questions or requests for help implementing them into your strategy!