The first thing any aspiring sports better needs is a dedicated bankroll allocated solely for the purpose of long term growth. This should go without saying. Failing to do so is the primary reason bettors lose in the long run. Even successful handicappers will fall victim to this and jeopardize the entire bankrolls because they do not have the discipline to stick to a long term strategy. In this article I will outline a basic strategy I use to grow my betting account over the long run.
The first thing to consider is if you cannot pick consistent long term winners, your bankroll will eventually hit $0 with a certainty of 100%. This fact cannot be avoided. It is like the law of gravity. The vast majority of bettors fall into this category. So if you find it difficult to pick winners consistently, or simply do not have the time required to dedicate to this activity, it is imperative you find someone you can trust to do the work for you.
Now let’s assume we have done all that. How much should you be betting on each game?
Proponents of the Kelly system suggest you should wager an amount equal to the expected ROI on an individual event. In theory this may be a good strategy, but as in most theories, it falls short in real life scenarios. I have used this on occasion, but it is far too aggressive in my estimation and produces wild bankroll and emotional swings.
It is a natural tendency for all bettors to over estimate their advantage. This can have devastating consequences for a Kelly bettor. Below is a short graph of your expected ROI for a given win percentage in a standard -$110 sports point spread wager.
50% = -4.5% ROI
52% = -0.7%
54% = 3.1%
55% = 5.0%
56% = 6.9%
58% = 10.7%
60% = 14.5%
While individual wagers will occasional exceed a 60% expected win rate, anyone thinks or suggest to you their long term average is higher than 60% is a liar or delusional. Therefore it is unnecessary to list ROIs higher than 60%.
Suppose a bettor estimates his winning percentage to be 58% and decides to wager 10% of his bankroll on each play. If he overestimates his winning percentage by just a few points and in reality only is able to predict 55% winners, his ultimate bankroll demise is virtually assured.
Until you have a long track record of consistently betting the point spread, you should certainly refrain from using an aggressive betting system such as the Kelly. The probability of busting your bankroll is simply too high in my opinion and more caution needs to be adhered to.
Now I am not completely ‘anti-Kelly’. Using a more cautious approach of say, 1/3 Kelly, may be appropriate. What this means is if your expected winning percentage is 54%, or 3.1% ROI, I would be willing to wager 1.0% of my bankroll on each play.
Now suppose further that the same bettor makes his ‘best bets’ selections and has a history of hitting 56% on these plays. His ROI on these bets are 6.9% so he can now wager 2.3% of his bankroll on each outcome.
If we extrapolate one more time, the same bettor makes his ‘game of the week’ and expects to win 58% of the time with a 10.7% ROI. Now he would be able to wager 3.7% of his bankroll on each outcome.
Always remember that any wagers with a negative ROI should not be made if it is your goal to be a successful handicapper. This means if your win rate is less than 52%, should not be gambling. I would recommend paper or fake picks for at lest one full season before establishing a real money account. Not everyone is going to be able to do this of course. But if you put in some time, and stimulate your intuition, it can be done.
It is important to note that establishing a reliable estimation of a win percentage in this scenario would literally take thousands of observations. This represents most likely several seasons of results. If you start your ‘gambling career’ by running hot and experience a winning percentage only a few points higher than the long term average, it will give you a bias towards being over aggressive. This usually results in the gambler losing his entire bankroll. I have made this same mistake myself. To further that point, it could be said the majority of all sports bettors are on a hot streak. Since any bettor who runs cold to start the season, will be at risk for losing his bankroll and forced to stop playing.
The 1/3 Kelly system offers a good balance between bankroll security and optimal growth rate.
The next topic I would like to address is stratifying your bets. I adhere carefully to the Pareto Theory in this situation. It states that 80% of your results will come from 20% of your efforts.
In the above example the bettor’s play of the week had a 58% chance of winning. If he placed one bet a day everyday, he could only have on play of the week. I suggest that two ‘best bets’ per week would be reasonable to expect. That leaves four daily picks that would fall into the ‘regular’ category. So let’s review.
PICK Win%. ROI% %Bank Units/week
Game/Week 58% 10.7% 3.7% 1
Best Bets 56% 6.9% 2.3% 2
Daily picks 54% 3.1% 1.0% 4
This is roughly the ratio I would suggest for most people. At least half of your plays should be coming from your ‘regular daily picks’. Less than 20% of your picks should fall into the category or plays of the week. The rest of the plays can fall into the best bets and should be more than 1/3 of the total plays.
In any given day, I generally find 2 or 3 reasonable betting opportunities per week. A typical week during basketball season, I may average 18 selections per week. So what I would be looking for is 3 ‘premium plays’ , 6 best bets, and 9 regular wagers. I like this ratio because it works and is easy to apply. 1/6th of plays go into my premium plays, 1/3rd into the best bets, and 1/2 into the regular plays.
I would simplify this process further by changing the amount wagered per bet to 4% on premium plays, 2% on best bets, and 1% on regular plays. You now have a reasonably safe and easy formula to remember and execute. It also provides extra entertainment value by putting a high premium on your premium bets where you can watch and enjoy the games.
This system has an additional benefit. It protects your bankroll from wild daily swings. Personally will not wager more than 8-10% of my entire bankroll on any given day. This will occasional be an issue if you have a full schedule of games and especially true if you are betting multiple sports. The worst single day of sports betting I ever experienced was an 0-8 Saturday night betting hockey. I lost around 1/4 of my bankroll that single day. I was fully devastated to the point of incapacitation the next day. Now on a busy day I may have 1 premium play, 2 best bets, and 3 regulars plays. Following my system, I would be wagering 11% of my bankroll that night. In reality, I would usually cut this down and simply cancel my regular plays for the day and put in 8% with the premium and best bets. This make life much simpler.
Now it is important to remind you that every individual bettor will be different and has different win percentages. You should use my simple formula to adjust to your own unique situation.