Sports betting, for most people, is a hobby, a side activity besides following their favourite sports. And it can easily become a lucrative activity, but only if a bettor can manage their bankroll properly to stay in the game longer.
Want to learn more about sports betting bankroll management, various proven strategies, and avoiding possible pitfalls when betting? Read on!
Understanding Bankroll in Sports Betting
First things first - what is bankroll management in sports betting? Bankroll is the common term for the amount of money you set aside to use on betting. It can either be money you’ve deposited into your betting account(s) or money you plan to deposit over the course of a single week or a month.
This amount can include your wins if you’re treating betting as a form of long-term investment. But, in any case, it should be the amount of money you’re comfortable with betting during a certain period of time. Money you’re prepared to lose, to be blunt.
Therefore, bankroll management means forming a strategy around spending (or investing) this money in a way that you can comfortably bet on sports while keeping track of your overall net balance.
Why is Bankroll Management Important in Sports Betting
Bankroll management is, as we’ve explained, a method of protecting your betting funds from running dry. It’s your safety net, a method to keep playing for a long time and, hopefully, keep your net profits positive.
Inexperienced bettors tend to be reckless, chasing after lucrative odds or trying to cover their losses. Instead of just blindly placing wagers and hoping for the best, proper bankroll management helps you keep a clear head and focus on the long game. It’s basically practising discipline and responsibility with your money.
With such a strategy, you’re aiming to avoid losses and keep your impulses in check. The main target here is not to lose more than you’re comfortable with. Ideally, though, you want to end a set period with positive results.
Sports betting is, after all, a game of knowledge. You’re not just learning about the sports, teams, and players, but also how to make good decisions. A properly managed bankroll will make you a better decision maker, a punter who makes a level-headed approach to every wager and knows how to handle their emotions or personal preferences.
Ultimately, as mentioned above, the goal is to maximise the long-term profits. If your betting endeavours are financially sustainable, you can bet for much longer periods of time. It’s as simple as that.
Betting Bankroll Management Strategies to Maximise Your Profits and Minimise Risk
Throughout the history of sports betting, serious bettors were developing methods and strategies for turning their bets into investments. Thus, they developed certain strategies to manage their bankroll and, in the long run, turn a profit slowly, but steadily. These are the most common strategies for sports betting bankroll management.
The Kelly Criterion
Kelly Criterion, or Kelly bet as it’s often called, is a mathematical approach to betting with the goal of maximising your profits in the long run. It was developed by John Larry Kelly Jr in 1956, and it’s an equation based on the geometric growth rate.
The calculation is as follows: the probability of winning, subtracted by the division of the probability of a loss and the odds given by the bookie. For example, a simple 50-50 bet on a coin toss with odds on one result being 1.2 turns into 0.5 - 0.5/1.2 = 0.083, or 8.3% of the current bankroll that you should wager on this bet.
Level Staking
Also known as flat staking, a level staking plan is based on betting a fixed amount regardless of the previous outcomes. You set an amount that you’ll stick to for each of your bets and not adjust it along the way. This effectively means you’ll have predictable losses, but your wins will cause more noticeable spikes. It’s an easy-to-follow, straightforward bankroll management strategy.
The Fibonacci Method
As the name implies, this method is based on the Fibonacci sequence of numbers, where each number in the sequence is the sum of the two numbers before it (0, 1, 1, 2, 3, 5, 8, 13, etc.). When it comes to sports betting and money management, the Fibonacci method works like this:
- Every time you lose a bet, move up by one in the sequence and bet that amount.
- When you win a bet, move down by two steps in the sequence and then bet that amount.
The theory is that, even if you have consecutive losses, your next win will cover your net loss greatly. While this method is more conservative than the infamous Martingale, it can lead to big losses, so we recommend a careful approach.
Proportional Betting
A betting method similar to the Kelly criterion, proportional betting involves setting your wager to a percentage of your bankroll. The percentage changes depending on the odds and your confidence in the bet’s outcome.
This method requires knowing how to bet and how to manage risk properly, so you can properly assess the quality of the odds. It’s also a good step up from the flat staking method, allowing you to be more conservative or aggressive when needed.
Five Tips to Avoid Common Betting Bankroll Management Mistakes
1. Set a Budget
It’s easy to lose track of your expenses when you bet on sports, especially when making live bets. So, the first thing you should do is set your weekly or monthly budget for betting, as well as set your wagering limits and stick to them.
Another very important step is not to chase after your losses. It’s very easy to fall into this behaviour, as the “next big win” might cover your previous loss. This leads to compulsive betting, losing track of wagering limits, and even greater losses most of the time.
2. Avoid Emotional Betting
“Bet with your head, not your heart.” This is a mantra every bettor should be familiar with. What it means is - put your personal preferences and favourites aside, don’t bet on a team/player just because you’re a fan, but instead take an objective approach to each wager.
In a similar fashion, do not let a few consecutive wins take your judgment away. A common sports betting money management mistake is to raise the wagers or even take on more risky bets after a winning streak. This is reckless and may easily lead to a negative net outcome.
3. Track Your Bets
You should be keeping track of your outstanding bets, wins, and losses. Pretty much every online sportsbook keeps a history of your bets, so that’s a great starting point. We’d recommend going a step further and creating a document where you’ll keep track of bets, wagers, and losses. Set up some formulas in the sheet to calculate your net outcomes, and you’ll have total control over your bankroll this way.
4. Diversify Your Bets
Remember the age-old saying about putting all eggs in one basket? Well, that applies to sports betting, too. Sticking to just one sportsbook, one sport, or even a single league will make you overreliant on that singular place for all your betting.
So, try to spread your bets across different sports and betting sites, minimising your risk along the way.
5. Use a Consistent Strategy
It’s easy to get carried away with a few consecutive big wins and start making more reckless bets. That’s how inexperienced bettors oftentimes end up losing all their winnings in a short time span.
Instead, resist the temptation and stick to the bankroll management strategy that you’re already using. This is a long game you’re playing and, ideally, a game you want to come out of as a winner.
Learn, Adapt, Adjust!
Hopefully, you now know how to manage a sports betting bankroll and you’ve picked up a few strategies to try out on your next betting endeavours.
Keep in mind that sports betting always carries a level of risk and uncertainty, just like any other gambling activity. Stay smart, plan your bets properly, and you’ll be on your way to becoming an expert punter.
