When the Supreme Court made the decision in 2018 to strike down PASPA and give states the chance to open legal sports betting markets, it changed sports in North America forever. As more and more states legalize sports betting, there are millions of Americans trying the activity for the first time and looking for sports betting bankroll management systems to protect their money and turn a profit.
Sports betting bankroll management systems are a vital aspect of being a successful sports bettor. They allow you to maximize your chances of long-term profitability while minimizing the risk of significant losses from any one bet or streak of losing wagers. Without strong bankroll management, even the best bettors will go broke.
There are many sports betting bankroll management systems to choose from, but it’s worth noting that none guarantee you success, and not every system works for everyone. The best bankroll management strategy is the one that you will stick to as even a perfect strategy will be useless if you deviate.
In this article, we’ll tell you everything you need to know about bankroll management, show you the ins and outs of the best sports betting bankroll management systems, the pros and cons of each system, and the benefits of coming up with your own system if none of the established options work for you.
What is bankroll management?
Sports betting bankroll management is just a fancy way to say managing your sports betting funds (your bankroll) in a smart way to maximize your chances of long-term success. Most importantly, practicing smart bankroll management is the best way to minimize the risk of you making significant losses.
When you start sports betting or gambling of any kind, it’s a good idea to put aside a set amount of money as your bankroll. This way, you can effectively size your wagers as well as make sure that you keep track of your profits and losses.
People who practice smart sports betting bankroll management set specific guidelines and rules that they adhere to when betting. Coming up with guidelines and rules can be difficult. Thankfully you don’t have to do it all by yourself. There are many existing bankroll management systems you can choose to adopt instead of coming up with your own. With that being said, not all bankroll management systems work for everyone, so it sometimes may be better to come up with your own.
Most Popular Sports Betting Bankroll Management Systems
If you look around on the internet, you can find dozens of sports betting bankroll management systems that are all claiming to be the best. To make it simple for you, we’ve done the research and can now present to you the most popular sports betting bankroll systems around.
Each of these systems has benefits and drawbacks, so after we explain the system, we’ll give you a handy pros and cons list for each.
Martingale System
The Martingale System is an extremely basic sports betting bankroll management system where you double the amount you bet every time you lose.
It’s one of the most popular and longest-practiced bankroll management systems currently used. It was first used in 18th-century casino games but continues to be very popular today for both casino and sports bets.
The Martingale System continues to be popular for three reasons. First, it’s simple. Second, it’s risky, which attracts many adventurous gamblers. Finally, it works in theory.
If your overall bankroll is $1,000 and your standard bet is a modest $10, here is what the Martingale System sports betting bankroll management system would look like in practice.
Bet 1
- Risk: $10
- Result: Loss
- Profits: -$10
Bet 2
- Risk: $20
- Result: Loss
- Profits: -$30
Bet 3
- Risk: $40
- Result: Loss
- Profits: -$70
Bet 4
- Risk: $80
- Result: Loss
- Profits: -$150
Bet 5
- Risk: $160
- Result: Loss
- Profits: -$310
Bet 6
- Risk: $320
- Result: Win
- Profits +$10
Assuming the odds for each of these six bets is +100 in American format, you would have earned a $10 profit. However, you would have lost $310 before placing your winning bet. And of course, you don’t know when your winning bet is a winning bet. If you lost your sixth bet using this strategy, you would have lost $630 and not had enough money in your $1000 bankroll to place a seventh bet that adheres to the Martingale System.
Running out of money, and doing it quickly, is the biggest risk of using the Martingale System. Because of this, some people with large standard bets have adopted a so-called Anti-Martingale System where they half their bets every time they lose. A common pitfall with this strategy is that too many losses may bring you below the minimum betting requirement. This is better than running out of money though, so it’s a popular strategy among the risk-averse.
Because sports bets have different odds than traditional casino games, many sports bettors opt for a slight twist on the Martingale System where your bet amount is based on how much you could have won with your previous bet. So if your first bet was $100 with +110 odds, you could have won $110. Your next bet would then be $210.
Another big issue with the Martingale system is that all casino games and many sportsbooks will have a maximum bet amount. If you’re playing a casino game with a maximum bet of $500, you’re out of luck once the Martingale betting system calls for a larger bet. Overall, this betting system is not one that works over a long time frame and should generally be avoided.
Pros
- Mathematically sound (in a vacuum)
- Popular
- Simple to understand
Cons
- Doesn’t work in reality when betting limits and bankroll limitations are taken into consideration
- Very risky and will lead to losing all your money eventually
Kelly Criterion
The Kelly Criterion is a mathematical formula developed in 1956 by American scientist J. L. Kelly Jr. It’s very popular among sports bettors because it’s the method that’s been proven to be most well-suited to maximizing your earnings over the long run.
The formula is a proportional bankroll management strategy, so how much you bet is determined by the amount of money in your bankroll. You can choose to update your bankroll amount every time you place a bet, or you can use an original bankroll amount and keep it static as you lose and gain money from your bets.
The Kelly Criterion is based on a formula which is f = (bp – q) / b
Where:
- f represents the fraction of your bankroll you should wager (i.e., your bet amount, often called the Kelly percentage)
- b represents the net odds received on the bet (decimal odds minus 1)
- For positive American odds, b= odds/100
- For negative American odds, b= -100/odds
- p represents the probability of winning, and
- q represents the probability of losing (1 – p).
Let’s say our bankroll is $1,000 and we’re going to bet on the Toronto Raptors moneyline, which has +200 odds. We do research and determine that the Raptors have a 40% chance of winning. According to the Kelly Criterion formula, our bet should be $100. See below for the calculation.
f= ((200/100)(.40) – (0.60))/(200/100) = 0.10 or 10%
0.10*1,000= 100
If you’re familiar with implied probabilities, you’ll know that 40% is not the implied probability of a +200 bet. The real implied probability of a +200 bet is 33.3%. This is something you need to be aware of with the Kelly Criterion bankroll management system. It only works if the win probability is higher than the implied probability.
This means for the Kelly Criterion formula to work, you have to estimate a win probability for yourself. This requires doing some research, and ultimately, making a guess. Being able to accurately estimate win percentages and then find discrepancies against the implied probability in the odds set by the sportsbook is how you can profit using this strategy over the long run.
Another strategy people do to minimize losses using the Kelly Criterion is to only bet a fraction of the Kelly percentage. For example, if the 10% of your bankroll sounds a little steep, you can bet half of that amount. Some people apply this rule to all their bets. In other words, they will always bet 50% of the wager amount calculated from the Kelly Criterion formula.
Pros
- Proven to minimize long-term loses
- Flexible as it responds to the amount of money in your bankroll
- Reliable formula allows consistency with your sports betting
Cons
- Complicated and requires some math
- Hard to reliably predict win probability
Flat Unit
Compared to the other sports betting bankroll management systems we’ve discussed, flat unit betting is by far the simplest. Using a flat unit strategy means betting the same standard amount (a unit) on every bet.
This bankroll management system is very attractive due to how simple it is, but also because of how easy it is to what you want to get out of sports betting. If you prefer to be a big spender, you can set a big unit size. More conservative bettors can keep a low unit size.
While it is ultimately your decision, we think it would be smart to set your flat unit size somewhere between 1-2% of your starting bankroll. Anything over 5% would be a little too risky as a flat unit, in our opinion.
Pros
- Easy to understand
- Relatively safe as long as you pick a conservative unit size
Cons
- Inflexible
Your Choice
If none of the sports betting bankroll management systems above work for you, it may be a good idea to make your own. This sounds like a complex process, but it’s actually relatively easy for most sports bettors since most people tend to have some strategy when they bet.
Most people are unaware of the fact that they are even adhering to a system because they are just doing what they do. This is why the hardest part of following your own sports betting bankroll management system is actually formalizing your process and adhering to it.
We recommend all sports bettors do this because the benefits of adhering to an established bankroll management system can help you keep track of your spending and minimize losses in the long run.
If you don’t know where to start, take a look at your current sports betting habits and look at some of the established bankroll management systems we’ve discussed. If there’s anything you like, try and incorporate them into your own routines.
Pros
- Tailored to you
- Completely within your control
- You may be more likely to stick to a plan if it’s your own
Cons
- Potentially biased because of your own personal blindspots
- Not backtested
Why is sports betting bankroll management important?
If you’re one of the millions new to sports betting since the changing of the laws across North America, many bankroll management systems may look like overkill. This is very much not the case though. Following a sports betting bankroll management strategy can be very beneficial to you. If you want to keep your money, you need to follow a bankroll management system.
Effective sports betting bankroll management will improve the long-term sustainability of your betting. By having a system in place, you can allocate your funds wisely and avoid excessive or reckless bets. Doing this allows you to minimize the chances of taking unnecessary risks and suffering substantial losses that could quickly deplete your bankroll. Bankroll management systems allow you to strike a balance between maximizing profits now and protecting your bankroll from substantial downturns that would prevent you from placing future bets.
Related to the idea of striking a balance is how bankroll management systems can help you keep your emotions in check. Having a system can help prevent you from making impulsive or emotional betting decisions like chasing losses or recklessly increasing the stakes of your bets. A structured bankroll management system makes you less likely to let your short-term emotions deplete your bankroll and affect your ability to bet in the future.
Bankroll management systems can help you track your betting performance over time. This means you can better identify your strengths and weaknesses, which allows you to learn from the past and improve your bets.
When you take all of these things into account, it is very clear why having a sports betting bankroll management system is a good idea.
What is a unit in sports betting?
A unit in sports betting is a standard amount used to represent the size of a bet. One unit is generally written as 1u. If you see someone placing a 2u bet, this means they are placing a bet two times their standard bet amount. For most people, a unit is 1-3% of their total bankroll.
Unit size depends on the person and how much they are willing to bet as a standard bet. For example, one person’s unit size can be $50. Another person’s could be $100. Other people, like people using the Kelly Criterion system, could be referring to a percentage of their bankroll when they talk about units (e.g. 5% of their bankroll = 1u).
Besides being used to standardize bet sizes, units are used in sports betting to help gamblers discuss bets between each other. For example, if Gambler A were to say that they bet $100 on a game, two friends listening could infer very different things. Gambler B with a total bankroll of $300 might think that Gambler A is extremely confident about this bet while Gambler C with their $100,000 bankroll might infer that it’s a risky wager. By using units, this confusion is avoided.
Why is the concept of units important?
Using standard units is also a key part of implementing the various bankroll management systems we’ve discussed in this article. For example, in the Martingale System, your first bet could be 1u, if you lose, your second bet would be 2u, and so on. A more complex unit could be half of a calculated Kelly percentage.
Units can be useful when comparing your betting performance against others. If you see two people who started at $1,000 and now have $10,000 from successful NBA bets, there’s no real way to fairly compare the two’s success without considering units. If the first person’s unit is $1,000, they are up nine total units. If the second person’s unit size is $500, they are up 18 units, which is much more impressive.
You can apply this same principle to your own betting. By having a standard unit size, you can determine how many units you are up or down. This is a good way of tracking your sports betting performances, assessing your profitability, and whether you need to change something.
Bankroll Management FAQ
There is no one best sports betting bankroll management system. You should pick the system that is best for you. Consider how much you are willing to wager with each bet and how much you value long-term sustainability versus making a quick profit.
Yes, keeping track of your bets is an essential element of all successful sports betting bankroll management systems. Keeping track of your bets allows you to assess your betting practices and recognize whether you need to change things.
Your bankroll is the amount of betting funds you have available to you for bets. You should not make available anything you are not willing to lose, so we recommend setting a specific amount of money to deposit into your account.
As a general rule, your betting unit should be between 1-2% of your bankroll size.
Increasing your betting unit size is very tempting but usually not a good idea. If you win regularly and your bankroll increases, your unit size will increase as well as it is based on a percentage.
If you feel your system isn’t working over a long period of time, you should consider changing bankroll management systems. You should do this strategically by looking at your past bets and identifying areas where you can improve.