Using The Kelly Criterion To Determine Unit Size For Sports Bets

Unit size discipline is the key to becoming a successful sports bettor

2 years ago

Kevin "Geek" Alan

The Kelly Criterion is a useful formula for determining the optimal unit size for sports betting. It takes into account the probability of winning and the payout of the bet, and can help to maximize the growth rate of a bankroll over time. However, it's important to remember that it's only one of many tools that should be used when making betting decisions, and to always have discipline and not chase losses.

The Kelly Criterion is a popular formula used to determine the optimal size of a bet in order to maximize the growth rate of a bankroll over time. In sports betting, it can be used to calculate the ideal unit size for each bet, depending on the probability of winning and the payout of the bet.

The basic idea behind the Kelly Criterion is to bet a proportion of your bankroll that is proportional to your edge over the odds. The formula is typically presented as: f* = (bp - q) / b, where f* is the fraction of the bankroll to bet, b is the net odds received on the bet, p is the probability of winning, and q is the probability of losing.

For example, let's say you have a bankroll of $1000 and you come across a bet with odds of +150 (meaning a $100 bet would return $150 if you win) and a 60% chance of winning. Using the Kelly Criterion formula, the optimal unit size for this bet would be 0.2 (or 20% of your bankroll). This means that you would bet $200 on this game.

It's important to note that the Kelly Criterion formula assumes that the bettor has an edge over the odds, which is not always the case in sports betting. It also assumes that the bettor has a large enough bankroll to withstand the volatility that comes with betting a large percentage of their bankroll on a single game.

For those who are new to sports betting, it's recommended to use a smaller percentage of your bankroll for each bet until you have a better understanding of the sport and the teams you are betting on. This will help to minimize potential losses and help you to build your bankroll over time.

In addition, it's important to remember that the Kelly Criterion is a guide and not a guarantee of success. It's always important to have discipline and not to chase losses. It's also important to use the Kelly Criterion in combination with other strategies and techniques when making betting decisions.

In conclusion, the Kelly Criterion is a useful tool for determining the optimal unit size for sports betting. It takes into account the probability of winning and the payout of the bet, and can help to maximize the growth rate of a bankroll over time. However, it's important to remember that it's only one of many tools that should be used when making betting decisions, and to always have discipline and not chase losses.