How much to risk when betting
Bankroll management in sports betting
One of the reasons why the vast majority of new sports bettors fail and bust quickly is due to a lack of basic bankroll management. It is one of the foundations of profitable sports betting: don’t bet beyond your means.
At any given time, you should not be betting more than 5 percent of your bankroll on a game. Just like you wouldn’t put all of your stock portfolio into a single stock, you would never want to put a large percentage of your bankroll onto one game. No matter how soft a line looks, they play the games for a reason, and a meaningless long shot Hail Mary pass or a half court shot in basketball can cause you to lose a bet in an instant, and that is frustrating.
It may seem boring to only bet 1 to 3 percent of your bankroll at any time. If your bankroll is $1,000, it is tough to look at that number and only bet $10 or $20 on each game. However, with proper bankroll management, you need to win roughly 53 percent of your bets to turn a profit. If you are betting 5 to 10 percent of your bankroll on a game, the variance of a few tough losses can and will make you go broke in a handful of losing bets.
Keep in mind that with almost every bet you place, the sports books have a 10 percent advantage. When you place a bet, it is typically $110 to win $100. Winning exactly 50 percent of your bets would lose you money over the long term. After 100 bets of breaking even at $11 per bet, you would have lost $50. Naturally, bigger bets consistently would turn a bigger loss than that.
When you are winning, your bankroll will grow, and you can subsequently increase your bet size to reflect 1 to 3 percent of your current bankroll. If you get on a hot streak and get your $1,000 account to $1,400, you can increase your bet size from $10 or $20 to $15 or $30. Likewise, when you are losing, decrease your bet size to reflect your bankroll. Do not chase your lost bets with bigger bets!
One of the biggest flaws in bankroll management is the chase bet. It is natural to want to cover your losses for each bet by doubling the bet size over and over until you win. This is called the Martingale betting system. At first, you lose a bet for $10. Then for $20, $40, $80, $160, $320 and finally you are left with $370 of your original $1,000. Six losing bets in a row is not unreasonable; in fact, you will lose six coin flip bets in a row roughly 1.6 percent of the time.
So, how do you decide when to bet 1 percent and when to bet 3 percent on a game? If you think that you have a real edge and find a soft line, it is acceptable to make a larger bet. If the Kentucky Wildcats are 5 point favorites and you think they should be closer to 10 point favorites, that is an unusually large edge, and you should try to capitalize on it.
