I’m the Odds Coach. This is part 1 of Bankroll Management for Sports Bettors Money management is sports betting is a strategy whereby you use set bet amounts over time to reduce the risk of losing your entire bankroll. This can keep you in the game long enough that the volatility or losing streaks inherent in sports betting can’t wipe you out entirely and your success will then be governed by your winning percentage and not by the volatility These concepts actually come from the world of investing in stocks and bonds, but they’re very different mathematically speaking. People will try to draw parallels but really the volatility difference in sports betting makes them quite different. What I want to do here is gonna take you to the desktop and show you a spreadsheet where I simulate 256 bets or an entire NFL season worth of bets and show you the volatility that you’re going to face. That is the real reason why you’re going to limit your bet amount: to make sure that you have enough to weather any losing streak.
What I have here is a simulation of betting 256 bets at $110 at -110 odds. Essentially spread betting the entire NFL season, every single game. What I have is the red line representing the ideal expected winnings. This is what would happen if you win 51% of your bet and lost 49%t of your bets.
Here in the winnings column, represented by the blue line, i have a simulation based on a random number generator but with the winning percentage applied to it. What you can see from that is the volatility over this short sample size of of wins and losses. You can see wild swings here in the amount that both is more won, and lost than expected. For instance if we look at an example like this one: the 55% over 256 bets, you could still end up that season$1,000 down. What you need as a sports bettor is to be sure that you’re going to have enough bankroll at the end of that to continue to place wagers.That’s where money management is going to come in and help you.Here i have another spreadsheet which is actually 10,000 bets placed over time; same conditions.
What you can see from this simulation is that the blue line volatility, though numerically as high as with the 256 bets, it’s approaching the red line. The fluctuation there is much less. That’s because over time the blue line should approach and approximate the red line with much less volatility. The important thing with money management is that you’re able to play long enough that you’re winning percentage becomes the main factor in your success in sports betting. Hopefully that illustrates the volatility inherent in sports betting and underscores the importance of money management. The next step is to determine a unit or bet size that’s appropriate to you as a sports bettor.
It’s a very individual thing. First thing you need to determine is the time period over which you’re looking to be successful. The longer the time. the better, because it who allows you to place more bets over time. That will help you eliminate the volatility factor and make your success more a factor of the the winning percentage that you’ve attained.
The next step is to determine the amount of money that you’re comfortable losing. I say losing because gambling is inherently risky. No amount of calculation is going to totally eliminate that risk. You want to be comfortable that you’re only investing money that you have set aside for entertainment.
The next is determining the amount of bets that you’re going to be able to play. So over that time period, once again ideally let’s say if it’s over a year, you’re going to take into account the amount of bets that you’re going to place on MLB, NBA and NFL over the course of that time. Let’s work through a quick example here. Say that your time is a full year and you know that you’re going to be able to invest 250 dollars every quarter or $1,000 over the course of a year in sports betting. You don’t need to determine it based upon the deposits that you have now at the sportsbook.Just the capital that you have access to over the course of the year. The amount of money that you’re comfortable losing over the course of the year.
To help determine that unit the next you need to determine the type of sports better that you are. First of all, if you are a frequent sports bettor.Are you going to be able to place a large number of wagers of the course of the year or are you only going to be dabbling game here game there. For this to be successful you’re going to want to have at least a hundred games over the course of that year long time .
but ideally closer to a thousand. If you’re placing any more than a thousand wagers over the course of the year there is risk inherent with the fact that you’re not properly handicapping games. Aim for numbers between100 and 1,000 over the course of the year.
That gives us percentages to work with. The next important factor is your comfort with loss versus your expectation. If you’re extremely comfortable losing the money you have but you’re looking to win either a large amount of money or lose it all, then you’re a little bit more open to risk. That means that your unit can be in the high range.
If you’re a professional sports bettor, you’re very risk-adverse because you’re living on your bankroll and you can never eat into it because that’s just like destroying your business. Those percentages generally work out to be between one and four percent on average. if you’re an average sports bettor who shops for lines, pays very close attention to the bets that they’re placing then probably a two percent 2%.
That is appropriate on all of your wagers. Once again if you’re a professional one percent or possibly even less is the appropriate amount of money. Bearing in mind that you’re bankroll is going to be much higher than the average sports bettor. What that looks like is, if you’re the more risky bettor, at forty dollars bet per thousand dollars.Bet over the course of the year you’re going to be risking $40,000 dollars in hopes that you’re winning percentage is going to be high enough that that’s gonna balance.
Likewise if you’re getting two percent you’re only risking that $20,000. You’re rolling through your money 20 times over the course of the year in hopes of achieving a profit. At that one percent, you’re pretty much just betting $10,000 on to be profitable as a professional sports bettor. Those percentages are generally good guidelines to follow.Those, once again, come from the financial industry but the math around them actually works relatively well for large samples in sports betting.