Sports betting is one of the few forms of gambling in which it’s possible to gain a real advantage over the long run. The house has no inherent advantage built into the rules of sports betting. Bookmakers try their best to set lines (and they are good at what they do), but they still work with limited information just like you and me. They also alter their lines based on all the money that comes in from other sports bettors.
If you work at it, it’s possible to get very good at finding mispriced lines in sporting matchups. Online sportsbooks offer hundreds of bets every day and it’s impossible for them to get it right every time. Additionally, the majority of money that comes in to a sportsbook comes from casual bettors who have no deep understanding of how to make profitable bets. That’s where the “skill” factor comes into play for professional bettors.
But no matter how good you are at analyzing matchups, there’s an easy way to go broke. The one simple trick to losing all your money is to play above your bankroll. Not even the sharpest of sharps can win every time or even 60% of the time. We all lose bets from time to time.
Sports betting is a high variance endeavor. You’re going to have streaks that work in your favor and streaks that work against you. The only way to ride through the inevitable downswing is to place bets that are small in comparison to the size of your bankroll.
Playing outside your bankroll is the most sure-fire way to go broke because it doesn’t matter how good you are at picking value bets. If you bet long enough, you will eventually hit one of those nasty downswings that we all experience. The only way to ensure your survival is to have a smart bankroll management strategy.
Recommended Bankroll for Sports Betting
The proper sports betting bankroll for you depends on your goals and risk tolerance. What I mean is the casual fan who doesn’t mind reloading once in a while can get by with less stringent bankroll standards than the professional who pays the bills with sports betting.
On the conservative side, I recommend that you size your bets to be equal to 1% to 2% of your total bankroll. This means that if you have a $1,000 bankroll, your bets should all be $10 or less. A more aggressive strategy can go as high as 5%, but there is more risk of going broke.
As a general rule of thumb, 5% is about as high as you want to go with any single bet. Once you start getting up to 7%, 8% and 10%, your risk of ruin rises significantly. If you want to avoid reloading and going broke, 5% should be the absolute maximum.
Yes, these are very conservative standards, but that’s what you need if you want to stay in the game. A skilled professional is happy to see a 55% win rate on his wagers over the long run. That’s enough of an edge to make some serious money, but it’s not enough to even put a dent in variance. It is not all that uncommon to go on losing streaks of 5, 10 or even 15 bets. It’s bound to happen when you work with a small edge.
A 55% win rate is very respectable but it’s still a relatively small advantage. If you routinely bet 10-20% of your bankroll, it’s pretty much guaranteed that you’ll go broke. A few weeks of running poorly with your picks going 1-4, 2-3 and 0-4 is pretty standard. You need to be able to survive those downswings by sticking to a conservative bankroll.
Moving Up and Down in Stakes
There are two schools of thought for moving up and down in stakes. Some people like to increase or decrease their bet sizes only after their bankroll moves 20-25% in either direction. For example, a bettor with a $1,000 bankroll would continue to bet $10 per game until he hits $1250. Then, he would move up to $12.50 per bet.
The advantage to doing it this way is that you can bounce back from your losing streaks quickly. If you move down every time your bankroll shrinks, you’ll find it harder to grind your way back up to your normal bankroll. The downside is that extended losing streaks hurt more.
The other option is to constantly adjust your bets to your bankroll. Every time your bankroll moves up or down, you calculate 1% of that. So if you have a few good picks and your bankroll moves up from $1,000 to $1,100, you would start placing $11 bets.
The advantage to this method is that you are constantly adjusting your bets and maintaining a strict 1% bankroll rule. Your losing streaks hurt less because your bets decrease in size every time your bankroll shrinks. Your winning streaks are magnified because your bet sizes constantly increase bit by bit as your bankroll grows. The downside is that it takes longer to recover from losing streaks.
Either method will serve you well as long as you maintain strict discipline. Bankroll management is not a particularly complicated subject. The issue most bettors have is actually sticking with it. They get upset or desperate to win back what they’ve lost and refuse to move down. Others get overconfident, increase their bet sizes and lose a big chunk of money real fast.
All you need to do to increase your long term expectation in sports betting is practice smart money management. The reason most people lose isn’t because they’re bad at making picks; it’s because their bad at managing their bankrolls. No matter how good you are, you WILL have losing streaks. If you play above your bankroll, you WILL go broke.