Find Out How Much To Bet
Several punters might be so skilled to understand that there is value in betting on a particular sports betting market. They might be unsure, however, how much to bet to make a potential decent profit while protecting their betting budget. Managing your betting budget is one of the most important skills that you need to acquire if you want to be a successful punter. In this betting guide we will help you with this task.
Betting Budget Management And Betting Success
There are two main pillars of being a successful long term sports punter. The first one is to be able to recognise the value in a betting market while the second is to manage your betting budget correctly. Basically, you need to be able to optimise the identified betting value but also minimise the risk if something will go wrong. In this article, we will go through some of the most popular and effective strategies to manage your betting budget.
Betting Budget Management Strategies
As you can imagine, many different strategies can be applied to sports betting when it comes to managing betting budget. Let’s go through the various aspects to have a better idea of what we are talking about.
What is your betting budget?
Your betting budget is the amount that you are willing to risk when betting on sport. We suggest you start with a budget that will allow you to bet in a way that can deliver consistent growth. You should begin with at least 50 units, but 100 would be better. The amount that you stake on every bet should be small, especially if your budget is not big. Starting slow and build up patiently is the best approach.
How much should I bet on each bet?
There are lots of different theories in this regards, and we will go through here some of those for your benefit.
A Constant Percentage Of Your Betting Budget
One betting strategy suggest to stake on every bet a constant percentage of your betting budget. This strategy virtually protects punters from losing the entire budget as the amount to bet every time will diminish if your budget allowed for betting will also drop. The problem, in this case, is that you are suggested to bet the same amount regardless of the odds.
Should you bet the same percentage of your budget on a 1.60 favourite as a 3.50 outsiders without looking at the different value? Surely not. The main problem with the Constant Percentage strategy is that even if it offers a way to manage your betting budget, fails in taking value into account. In a way, it only finds a way to manage the way you lose your budget.
Odds Have To Be Considered
Another method, which is similar to the one we have just seen, go a step further and take into account the odds that are offered for a particular wager.
For instance, if you bet 5% of £1,000 budget as a standard unit, this will be £50. If you are betting on odds of 2.00 the unit will stay £50 but if you are betting at odds of 11.00 then the unit will go down to £5. This is the formula:
(£1000 * 0.05) / (11.00 -1) = 5
This is surely a good way to determine the stake when betting on outsiders but what if we want to bet on short-priced favourites? Betting on a 1.05 favourite will mean you will have to wager the whole budget. We would never advise you to bet on anything close to a 1.05 favourite and even less the entire budget. This, however, shows the limitation of this strategy.
Betting Budget Management – The Kelly Criterion
The Kelly Method was invented in the mid-1950s, and even if it has its critics, it has stood until today. This strategy takes into account the probability of a team or player winning and the value of the odds that are offered by the bookmaker in relation to that probability. The value is called overlay.
The system suggests you bet more if the value is greater. The tricky part is that you have to assess the probability of events with consistency. As we have seen in a previous lesson, the value, which is also known as the overlay), can be calculated as:
Value = (% probability multiplied by decimal odds) minus 100%
Different Types Of Kelly
Over the years the Kelly method has been amended, and even if the basics remain the same, there are now some different versions. Let’s take a look at what those are.
Betting Budget Management – The Full Kelly
Even if Full Kelly is very popular, there are some warnings to be made as it can suggest risky amounts to be staked. In some cases, it can suggest a bet as large as 50% of your budget. If things go wrong, you can lose the entire amount in a short time. On the other hand, if you get a winning streak, you can see your bankroll going into the sky.
This is the formula:
Percentage of bankroll to bet = overlay divided by (odds minus 1)
So if you have an overlay of 20% and odds that are 2.40 and a betting budget of £1,000 the Full Kelly strategy will suggest a bet of £143 which is 14.3% of the bankroll.
Betting Budget Management – The Fractional Kelly
This is a conservative amendment to the Full Kelly method. Basically, you only bet a certain fraction of the suggested bet. The 50% is known as the Half Kelly, the 25% is the Quarter Kelly and you can also do the percentage you will comfortable with. Although the winnings will be reduced depending on the Kelly method you go for, this tends to bring better results long term compared with the Full Kelly method.
Betting Budget Management – The Constant Kelly
This is the same as the Full Kelly method but instead than having a percentage of a varying amount it suggests a percentage of a constant. So for instance, instead of going 15% of a diminishing or improving budget, it recommends 15% of the same amount.
Many Bets At The Same Time
One of the limitations of any Kelly method is when you are betting on multiple events at the same time. Let’s imagine there are four games you want to bet on. All of those are played at the same time. The recommended percentage can well go up to 135% of your budget, which is impossible. A way to go around this problem is to adjust the percentages proportionally so that the total is still a maximum of 100%. The issue would be that you are still betting all your budget on events happening at the same time, all of which could lose. To deal with this, you could use a fractional method so that regardless of the number of events you bet on the same day, the total will not burn 100% of your bank.
What changes do we suggest to Kelly’s method?
We do suggest a 10% fractional Kelly method. This will allow you to safeguard your betting budge while diversifying and placing lots of bets on the different sporting events that are being played daily.
Let’s say your betting budget is £5,000 and you are betting on a football team at odds of 2.60 with an implied probability of 50%, we will have an overlay of 30%. In our suggestion, the recommended stake amount would be determined as:
(bankroll * chosen fraction) * (overlay/(odds – 1))
i.e (£5000 * 10%) * (30% / 1.60)
(£500) * (18.75%) = £93.75
Give it a go
There are many betting budget management strategies out there. We do believe that the Fractional Kelly is the best out there as it rightly factors in the odds being offered, the probabilities implied in determining the betting amount. We suggest you have a go and figure out what set up is best for you. In doing so, make sure you don’t risk your betting budget and avoid an early end of your sports punter career.