Money management, or bankroll management, is one of the key skills required to be successful at sports betting.
Despite this fact there are many aspiring bettors that don’t even understand the importance of good bankroll management, let alone how to do it properly. Of course spotting value is essential to turning a profit but without money management discipline, it's easy to wipe out and for all your hard work to be undone.
So how much of your bankroll should you bet?
First of all, it’s important to determine what your bankroll is. It goes without saying you should never bet more than you can afford to lose. Before you start wagering, you need to figure out what your starting bankroll actually is. Your betting roll should always be kept separate from the rest of your funds.
As for bet sizing, well there have been about as many 'systems' for varying the bet size as there are systems to beat the roulette table. None of them work and all of them do harm by giving false expectations. Double-up systems, star betting, even the much lauded Kelly criterion all have the same thing in common. They adversely affect the cash flow and they raise the break-even percentage that must be accomplished.
With that in mind it is recommended that a sports investor bet 1% to 3% of their bankroll on each bet. Conservative sports investors (or beginners) should bet 1% to 2% on a play. Note that professionals are normally in the 1% range.
Aggressive sports investors might want to bet 3% on a play. 2% is a good medium; it allows you to withstand a losing streak while helping to build up your sports investing bankroll. Very aggressive investors might bet 4% or 5% of their bankroll on a bet, but this is too risky for most investors.
What’s wrong with being aggressive you ask and staking 4% or 5%? The answer is losing streaks can lead to risk of ruin. If you bet amounts that are too large, a bad streak could cut your bankroll in half (or worse). You then might feel like you need to reduce your bet size, just before the inevitable hot streak. Smaller bet sizes are more prudent and allow you to stick to your approach and stay disciplined.
When do I recalculate my % bankroll?
You of course have the option to recalculate your bankroll after every winning and losing bet for a tapered % unit size, but if you are betting on multiple events at the same time this can be both tricky and time consuming. Another alternative is to use a plateau system, recalculate your bank roll when it increases (or decreases by a certain percentage, 20% being a recommended amount), this means you don’t lower bet sizes after a small losing streak and leave value on the table you otherwise would have taken. Conversely you do not start increasing stake sizes until you have seen a sustained healthy return on your bankroll and you have shown your bets are proving to be value.
The theory of money management is pretty straightforward in theory, in practice its keeping discipline that proves to be the often incredibly tricky part. Keeping discipline is imperative to avoid an early end as a sports bettor and the longer you are in the game the more you will learn and the more time you give yourself to show that you can be a success.