What is Bankroll Management?
Bankroll management is the practice of allocating a specific amount of money for betting (your bankroll) and implementing rules to protect it from the inevitable variance in sports betting.
Even winning bettors experience losing streaks. Proper bankroll management ensures you survive the bad times and capitalize on the good times. Without it, even a skilled bettor can go broke.
Golden Rule: Your bankroll should be money you can afford to lose completely. Never bet with rent money, savings, or borrowed funds.
Understanding Betting Units
A unit is a standardized bet size based on a percentage of your bankroll. This allows you to:
- Bet consistently regardless of bankroll size
- Track performance accurately ("+10 units" means the same thing whether you have $1K or $100K)
- Scale bets up or down as your bankroll changes
- Compare results with other bettors
Recommended Unit Sizes
| Risk Level | Unit Size | $1,000 Bankroll |
|---|---|---|
| Conservative | 1% | $10/unit |
| Recommended | 2% | $20/unit |
| Moderate | 3% | $30/unit |
| Aggressive | 5% | $50/unit |
The Kelly Criterion
The Kelly Criterion is a mathematical formula that calculates the optimal bet size based on your estimated edge. It maximizes long-term bankroll growth while minimizing risk of ruin.
Kelly % = (bp - q) / b
Where:
- b = decimal odds - 1 (e.g., +150 = 1.5)
- p = your estimated win probability
- q = 1 - p (loss probability)
Kelly Variants
Full Kelly
Maximum growth, high variance. Not recommended.
Half Kelly
Recommended for most bettors. Good growth, manageable risk.
Quarter Kelly
Conservative. Lower growth but very safe.
Risk of Ruin
Risk of ruin is the probability of losing your entire bankroll. Understanding this concept is crucial for long-term survival.
Factors that affect risk of ruin:
- Win Rate: Higher win rate = lower risk
- Unit Size: Smaller units = lower risk
- Odds: Betting underdogs increases variance
- Bankroll Size: Larger bankroll = more cushion
Bankroll Management Rules
Frequently Asked Questions
What is a betting unit?
A betting unit is a standardized bet size, typically 1-3% of your bankroll. For a $1,000 bankroll at 2%, one unit = $20.
What is the Kelly Criterion?
A formula that calculates optimal bet size based on your edge. Kelly % = (bp - q) / b. Most bettors use half or quarter Kelly for safety.
How much should I bet per game?
Most professionals recommend 1-3% of your bankroll per bet. Never exceed 5% on a single wager.