Bankroll Management: How to Manage Your Money Efficiently
Great gamblers know how important it is to keep learning and developing betting knowledge.
If you’ve trodden that path already, you know how hard it is to spot the right moment to place a bet. Knowing how odds work and how to find value sports bets is crucial.
Once that is done and dusted, all there’s left to do is understand how much money to place on a bet.
That’s where bankroll management comes in! We’ll guide you through its importance and how you can use it to your advantage in the search for better results.
A Guide to Bankroll Management in Sports Betting
Your bankroll represents the money placed on the side for betting.
It varies from player to player, and while some have $20 to risk, others can have $100 or far more.
Our advice is that you consider it as money you don’t mind losing while having fun.
Correct bankroll management means you should know how much money to place in a single bet. According to the amount you have to start with, the idea is to make the most of it.
A structured approach will ensure you keep a decent amount on your side while avoiding significant losses due to wrong decisions.
Sometimes, even experienced players will lose money. That’s not always a result of getting their odds wrong, but most importantly, for neglecting bankroll management.
To clarify, we’ll give you an example of how things can quickly go wrong:
You start with $100 and place a bet on a tennis match. You found a value bet with decent odds of +220 and put $20 on your favourite player to win.
To make things more interesting, you go ahead and bet another $50 on another match. You’ve spotted an exciting game, decide it’s time to risk a little and believe it’ll be an easy win, with odds of +125.
The first match goes your way with a win, but unfortunately, the outcome of the second match falls to the underdog’s side, and your $50 bet is lost. Thanks to a single result gone wrong, your bankroll has now gone from $100 to $72.
It’s paramount you know how to identify risk and learn how much to bet accordingly. Only then can you retain as much of your money as possible.
This is a long-term strategy, and you should always consider it as a marathon. You’ll notice that rushing towards the end will only mean you won’t make the finishing line.
Fortunately, there are some proven and easy strategies to help you manage your money, and we’ll give you an overview of all of them.
3 Proven Methods for Good Bankroll Management
There are mainly three approaches to making the most of your money in sports betting:
- Fixed unit model
- Percentage model
- Kelly Criterion
The Fixed-unit Model
This approach establishes a unique value for all bets – the fixed unit. This is a conservative approach, but it does offer the benefit of keeping your bankroll management in check.
Let’s assume your bankroll is $60. You’ll bet $3 in each round, representing 5% of the total. Betting those $3 against an odd of +200 represents a gain of $6. Your bankroll will then rise to $66.
Even after landing a win, you should stick to this strategy and place another $3 on your next bet.
What if you placed five bets in a row of the same amount and won none of them? If that’s the case, a review of the percentages may be in order.
After all, the idea here is to retain as much money as possible and play in the long run. Even experienced players bet only 2-5% of their bankroll.
If you’re wondering whether this is the right approach to your gambling needs, here’s a summary of the main points:
- You always know how much you’re going to spend
- Since the bets are pre-established, there is less room for disappointment
- Easy to implement
- A rigid system that doesn’t consider bankroll changes
The Percentage Model
The percentage model provides the safest and more flexible approach to bankroll management.
Opting for this strategy allows you to always risk the same fixed percentage from your bankroll – somewhere between 5% and 10%. With this approach, you keep a healthy balance between wins and losses.
If you pick 10%, you’ll keep placing 10% of your total bankroll amount with each bet.
Let’s consider you have $100 to play around with, and you’re committed to sticking to this approach. For this example, we’ll consider fixed odds of +200.
By opting for lower percentage rates, you benefit from a safer bet and stay as further away from disastrous results as possible.
However, this strategy allows you to take more significant risks if you feel like it.
Should you come across a value bet you’re happy with, it may be worth raising your percentage to pursue a more significant profit.
It’s easy to realize why this option is more effective than the fixed-unit one. Its dynamics allow you to adapt the amount of each bet depending on how your bankroll performs.
Also, you’re free to adjust the percentage for each round according to the size of your bankroll.
If you come across a value bet and your bankroll is $100, aim for that 10% we mentioned and place $10.
If you win, that’s great, but should you lose, it may be wise to reduce the percentage for your next round and protect your bankroll as a result.
The advantage of that conservative turn is that by reducing the percentage down to 5%, for example, you’re reducing the risk of making your situation any worse.
Here are some of the main pros and cons of the percentage model:
- You have more control over your money
- It’s a dynamic approach where you can alter the percentage with each bet
- It considers bankroll fluctuations
- It may be hard to apply with large bankrolls
- You may need to reduce the percentage to limit losses
- Requires some experience to use with success
The Kelly Criterion Mode
The most advanced method listed here for bankroll management, the Kelly Criterion, is particularly beneficial for sports betting.
You can also use it in the investments market or as a complementary strategy for poker bankroll management.
This approach considers all the odds involved to determine how much money should go into a single bet. There are a few variations, but we’ll stick to the simplest formula:
(B x P – Q) / B
- B = Decimal odds – 1
- P = Probability of success
- Q = Remaining Probability of failure
Let’s assume you consider yourself knowledgeable in any given sports category. You realize the probability of your favourite team or player winning is closer to 65% rather than the 71% advertised on your usual sportsbook.
Assuming the best deal you can find for that match translates into odds of 171, start by moving the decimal dot so that 171 equals 1.71. This will be the starting point for your calculations.
B = 1.71 – 1 = 0.71
P = 0.65% (from those 65% you assumed)
Q = 1 – 0.65 = 0.35
(0.71 x 0.65 – 0.35) / 0.71 = 15.7%
The Kelly Criterion suggests that considering the presented odd and our estimation on the actual probability, we should place a bet equivalent to 15.7% of our bankroll.
If the result turns out negative, you should pass on this event and look for another opportunity elsewhere.
For some, this value may seem a little too high and accounting for more risk than they appreciate. That’s one of the downsides of applying this method.
Sometimes, you can calculate a bet of 20% to 30% of your total bankroll. It’s up to you to decide whether you’re willing to take the risk since, ultimately, there are no guarantees of success.
We suggest that you should never bet more than 15% of your total bankroll. If you decide to do it, ensure you’re highly confident about the result.
Pros and cons of the Kelly Criterion mode:
- Bankroll management is based on both the odds you calculate and those the sportsbook presents
- It’s a dynamic approach, as it considers the amount of each bet
- It allows you to identify value bets easily
- It may suggest a high bet percentage which you’re not comfortable with
- It’s mathematically more complex
Examples You May Find in a Sportsbook
Let’s take a look at another example. Later this weekend, you’re looking forward to enjoying and betting on some of the best live NBA action, and it’s time to decide how much money to put on the result.
Let’s assume you’re making things easy on yourself and decide to opt for a moneyline bet.
Sacramento Kings offer 2.42 odds and the Memphis Grizzlies 1.59. Applying the same principles as discussed before, the Kelly Criterion calculates a bet of 14.79% for Sacramento and a -34.75 result for Memphis.
You’re still in the range discussed previously, therefore and if you feel comfortable, place your bet on Sacramento and forget about Memphis winning this one. It’s not impossible, but it’s statistically unlikely.
Always opt for value bets, which tend to have odds of 200 and above. These can easily be adapted to meet the formula provided above.
Even if you understand how odds work and how to identify value bets, it’s not always clear how much money you should place on each round, which is why you should keep bankroll management in mind.
We surely don’t want you to risk a single cent more than required when enjoying sports betting, and we want to ensure you’re gambling responsibly. Therefore, we recommend you always opt for a balanced approach.
If you find a value bet that presents lower odds than those you consider, apply the Kelly Criterion to provide more information on how much money to place safely.
Experienced players use several approaches, so you don’t have to stick to a single method.
Our aim is for you to have fun safely, betting with a comfortable process that returns some money and where you feel you can evolve every time you play.
Remember that success in sports betting should be considered a long-term process, with wins resulting from dedication and resilience.
You can find some of the best sportsbooks in Canada right here to start applying these methods and improve your bets along the way.
How can I manage my bankroll in sports betting efficiently?
Several systems help you make the most of your money, limiting the emotional effect a result can have on you and your bankroll. We suggest having a look at the fixed unit model, the percentage model or the Kelly Criterion. Each will help you determine how much money to bet on each round.
How can I manage my poker bankroll?
The same principles discussed here for sports betting can easily be applied to poker. Poker matches are dynamic, with odds changing considerably. Therefore, it’s wise to opt for a conservative or balanced approach. Each of these will keep your bankroll healthy throughout the many events of a game.
How much of my bankroll should I bet?
Our suggestion is never to bet more than 15%, even when you find a value bet. Consider the existence of the house’s edge, and that surprises can occur on any match. The main idea is to protect your money and make it last in the long run.
What is the most profitable betting strategy?
If you stick with them for long enough, any of the presented bankroll management strategies presented on this page effectively return profits. There are no absolute strategies that will guarantee you always win, so the only sensible approach is to manage your own money wisely.