Bankroll Management in Sports and Gambling: 4 Strategies for Profit

Bankroll management is just as important for long-term success as winning sports bets.

Unscrupulous bankroll management is one of the biggest mistakes novice bettors make. They will bet more if they are passionate about a particular game, and less if they don’t love the game. They’ll also double down if they win big because they’re overconfident. As soon as they get cold, they will start chasing, hoping that they will win it all back in a blink of an eye.

This strategy is unsustainable and dangerous, and can quickly bankrupt your bankroll.

So, with this in mind, we put together some important pieces of information to help you manage your bankroll and make a profit.

What is bankroll management?

Your bankroll for sports betting is very different from your bankroll in real life. Money is usually your reward for doing your job. The money is used to purchase goods and services. At the end of each pay period, you are rewarded with more. It is a cycle.

Your ability to make more money in sports betting is dependent on how much you have. You won’t be able to generate additional income if you are too aggressive or your bankroll shrinks. It’s up to you to look after your bankroll and grow it responsibly. This is bankroll management and you need to know it by heart if you want to be successful.

It is important to view beating sportsbooks as a long-term endeavor. If you are too aggressive, the short-term variance can cause a serious financial hit to your bankroll. The cream will rise to the top only if it is sustained over a longer period.

Bankroll Management: What amount should you bet on each game?

We would all have huge bankrolls that allowed us to comfortably bet around 1% per bet in a perfect world, but it’s not the case. Moreover, it may not be the best for novice gamblers.

If you have a $1,000 bankroll, which isn’t a small amount of money, 1% equals $10 per bet. This is not the best way to begin a hobby.

While being more aggressive with a smaller account is acceptable, I don’t recommend betting more than 5% of your total bankroll, as anything beyond that is too risky. The recommended medium is around 2.5%.

You can choose to go with 1% or 5% or anywhere in between. This amount is your standard “unit size”.

Units

Because it is easier to compare your results with other bettors in sports betting, units are used. It wouldn’t be fair for one player to compare the amount of money he has won betting on the NFL with another player who has a $10,000 bankroll. The player with a larger bankroll may have a worse record, but still, make more money from sheer volume.

Unit size is a way to calculate how much you can wager relative to your standard bet. A $100 unit would equal five units. If your wager is $500 and your unit size is $100, you will be up $500. This allows you to calculate how much you can make as your unit size grows. Unit size is usually displayed as 1U.

Bankroll Management Strategies

Having a bankroll management strategy from the start will tremendously help you in the long run. You don’t have to place the same amount of money on every game. You can incorporate a variety of strategies into your sports betting profile. Here are the bankroll management strategies that you can use in order to make sure you make a profit:

Flat Betting Model

Looking for the easiest bankroll management strategy? Here it is. This strategy is the easiest to manage your bankroll and it’s the most reliable in the long run. It involves setting your unit size, then placing exactly one unit per wager. It doesn’t matter what your recent betting form is, how confident you are, or the odds.

You will need to decide if you prefer the “to win” or “risky” option. To win 1 unit, you must take into account the juice if you choose “to win”. To win 1.0 units, you will need to wager 1.1 units on a wager using standard -110 odds.

You don’t need to wager additional units to cover the vig if you choose the risk method. This means that a -110 wager would result in 1.0 units of risk to possibly return 0.91.

This is also true for betting on moneyline-underdogs. You can risk a flat 1.0 or enough to win just 1.0 units. If you want to place a bet on a +250 Underdog, you have two options: risk 1.0 unit to win 2.5 units, or risk 4 units in order to win 1.0.

Personally, I prefer to use the “to win” method for spread bets, and the “risk” method on money-line underdogs. But ultimately it is up to you to choose what makes you feel most at ease.

This method has the greatest perk when it comes to bankroll management: it will protect your bankroll and still ensure profitability if you pick winners at a higher rate than the breakeven point.

Keep in mind that this method will require you to review your bankroll periodically. You should adjust your unit size if you notice a significant increase or decrease in units.

Percentage model

The percentage model works in the same way as flat betting. Your bankroll will determine your unit size. Although the numbers will be similar at the beginning, your unit size will move much faster than the flat model.

Let’s take, for example, a $1,000 start bankroll. Your standard unit will be 2.5%. To do this, you’ll need to place $25 in each of the percentage and flat betting models. Then things change. Your bankroll will grow to $1,025. If you win your first wager, it will be worth $1,025. This means that 2.5% of your bankroll will increase to $1,025.

This strategy allows you to capitalize on your winning streaks. After each successful bet, you increase your bet responsibly. This allows for greater returns on your investment.

It can be difficult to dig yourself out of a hole. Your wager size will decrease if your bankroll drops below your starting point. This makes it more important to time your wins than in the fixed unit model. This strategy is slightly riskier because of the extra variance.

Confidence Model

You can increase your bet size for games in which you feel more confident using the confidence model. You can still wager 1.0 units, but increase it to 2 or 3 units occasionally. It is not a good idea to increase your unit size unless you are able to consistently win your most confident bets.

Before you commit to the vehicle, it is best to test-drive the model, as it’s not hard to do at all. Tracking your bets in Excel – something that you should do regardless of your betting method – allows you to track how confident you are about each wager. You can track your wager record, even if you have the same wager size. It makes sense to increase your wager size if your most confident plays have a better record than those who are less confident.

You can also sprinkle a half-unit of the confidence model on certain bets from now to time. This can be used to place higher-stakes wagers such as parlays or moneyline underdogs.

Kelly criterion model

The Kelly criterion model is a reimagining of the confidence model, taken to a new level. Instead of giving each pick a confidence level, you calculate your winning percentage for each bet. Then, you would plug this number into the formula below to calculate how much of your bankroll should be put into play.

(Decimal odds for your wager * win probability-loss probability) / Decimal odds for your wager = suggested wager percentage

Although it may seem daunting, this formula is not difficult.

Let’s take a look at an example. The formula for a standard -110 bet would look like this:

(0.91*.55-.45)/0.91= 0.055

This means that the Kelly criterion model suggests a wager of 5.5% on your bankroll.

The model will suggest a higher amount if your confidence or moneyline odds increase.

These numbers can be very aggressive. Consider a +200 underdog who has a 50% chance to win. This is the formula:

(2.00*.50-.50)/2.00=0.25

Kelly’s criterion model suggests that a ridiculously large 25% of your bankroll would be the ideal wager in this scenario.

It is important to be very precise about your winning percentages. You can lose a lot of your bankroll if you make mistakes in this area.

You should not attempt this method unless you have done extensive research about your ability to accurately gauge winning percentages. Even then, it might be worth trying a modified version. Professional sports bettors often use a half-or-quarter Kelly criterion model. This means that you would wager half of your suggested bankroll. This model still has more upsides than traditional flat betting and percentage betting models but also mitigates some of its downsides.

Bankroll Management: How to Track Your Results

No matter what bankroll management system you choose, it is important to track your results. You can only be as powerful as your knowledge and the results you track will give you the information you need to audit your performance.

Is there a certain sport you are crushing that isn’t killing your bankroll? Do your confidence levels match your results? Do you excel at spread betting, moneyline betting, or over/unders bets? Tracking your results will allow you to easily track all of these data.

To track these data, you can either create a spreadsheet or use an app.

Bankroll Management in a wrap: Final Thoughts

As you can see, bankroll management is no joke. There are a lot of things to be taken into consideration, but once you fully understand everything there is to know about it, things will get easier, and profits will get higher.

If there’s something else on your mind, don’t hesitate and reach out in the comment section below, or straight on our contact page.

And as always, remember to bet with your head and not over it.

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