In the year ending March 2018, the GGY for the remote gambling sector peaked at a staggering £5.4 billion. This represented a 13.7% increase on the previous year’s figures, with virtual sports betting accounting for an estimated 37.1% of this yield.
While online sports betting may be an increasingly popular pastime, however, it’s only guaranteed to be profitable for the operators who list odds and offer access to an array of markets. Make no mistake; if you want to achieve long-term success as a sports bettor, you’ll need to learn how to recognise the value in the market and manage your bankroll efficiently.
We’ll focus on the latter in the article below, whilst offering some actionable steps to help you create a winning formula.
If you’re to successfully manage your bankroll, you need to start by understanding exactly what this is and how it relates to the sports betting experience.
In simple terms, your bankroll represents a finite amount of cash that you’re willing to risk in the pursuit of sports betting returns. This will be set according to a number of factors, including the markets that you intend to bet on, the frequency of your wagers and the amount of money that you can afford to lose within a predetermined period of time.
This money will then be used to fund individual bets, and there are a number of strategies that can help to provide structure to your bankroll management and make the absolute most of your wagering capital.
We’ll cover some of these in more detail below, but on a fundamental level, it’s important that you manage your initial expectations and make a commitment to start small.
This allows you to learn the practical art of bankroll management without placing too much of your hard-earned cash at risk from the outset, while it also lays the foundations for long-term and ultimately sustainable gains.
There are various strategies available to punters who want to efficiently manage their bankroll, but it’s fair to say that some of these are more effective than others.
One of the strategies most commonly recommended for beginners is based on the principle of betting a constant percentage of your bankroll. This is then applied across each and every bet, and it’s assumed that this technique will help gamblers to safeguard their bankroll against the risk of large or disproportionate losses.
While there’s obvious merit to this strategy, it also has a fundamental flaw that goes against one of the founding principles of sports betting. More specifically, this type of strategy assumes an equal value for each bet that you place, regardless of the price on offer and the probability of your preferred outcome.
Even if you’re a relatively inexperienced sports bettor, we’d recommend that you take the odds into consideration before you choose how much to wager on a specific event or outcome.
There’s even a basic formula that enables you to bring this strategy to life, and one that requires to divide a generic and predetermined percentage of your bankroll by the odds of the outcome that you intend to back.
Let’s say that you typically bet 5% of a £1000 bankroll as a standard unit (this would be equal to £50). When applied to a wager with odds of 2/1, the betting unit remains at £50, but a price of 11/1 would change the equation and reduce your stake amount to just £5. This can be written down as follows:
|(£1000 * 0.05) / (11.00 -1)||=||5|
As we can see, the second part of the equation alters the stake to suit the value proposition of the bet and the potential risk to punters. As a result, bets with a higher probability of success will require you to wager close to your maximum stake, whereas outside punts will reduce your spend in relation to the risk and potential return.
In theory, this represents an excellent way of managing your bankroll and leveraging it to capitalise on the value proposition associated with each individual bet.
Clearly, the notion of value is important to successful bankroll management, as it helps us to identify an optimal amount to wager in relation to each individual bet.
A number of other theories have been built on this principle, including the popular and widely used Kelly Method. This strategy, which was first created during the mid-1950s, considers the probability of a potential outcome and the associated odds to offer a clear indication of value to bettors.
This criteria essentially means that you’ll wager more or less depending on the value on offer, but it also requires you to assess the probability of each available outcome in greater detail before placing your bet.
We’ve outlined this as an equation below, and there’s no doubt that it’s far more scientific method of managing your bankroll. It may also prove to be a little daunting for novice punters, however, particularly as there are different versions of the Kelly Method available depending on your appetite for risk.
|Value||=||(% probability multiplied by decimal odds) minus 100%|
Seasoned bettors with a heightened appetite for risk may prefer to utilise the “Full Kelly”, for example, as this applies the above formula indiscriminately and across every single bet. As a result, you may find yourself wagering as much as 50% of your bankroll through a single bet, increasing the risk that you’ll decimate your cash within a relatively short space of time.
Conversely, a successful sequence of bets can optimise your winnings considerably, so you’ll need to consider your approach to risk and the initial value of your bankroll carefully before deciding on a strategy.
For beginners (or risk-averse bettors with a relatively modest bankroll), the so-called “Fractional Kelly” offers far greater value.
This takes the original equation and simply reduces the total stake value by a fixed percentage each time, spreading your risk and making your bankroll stretch further in the process.
Whether you choose to wager 25% or 50% of the recommended stake, you’ll have the autonomy to set this cap and apply this consistently across your betting strategy. Over time, you may even want to vary the percentage according to the terms of each individual wager, as this makes it possible to leverage your competitive advantage to the fullest.
Just remember; while this will make your bankroll stretch further and translate into longer-term gains, you shouldn’t expect to record the type of large, single bet wins that define the Full Kelly strategy.
While each of the strategies we’ve discussed so far is effective, they also have their own unique drawbacks that need to be given careful consideration.
This is why you need to develop a flexible and tailored bankroll strategy that negates these potential flaws, while also allowing you to place multiple bets simultaneously.
In this respect, the fractional iteration of the Kelly Method can prove problematic, as you may be required to bet more than 100% of your bankroll at any given time. More specifically, if the recommended percentage of your bankroll for these wagers was 25%, 35%, 35% and 40% respectively, you’d theoretically be committing 135% of your capital in one fell swoop.
This clearly not viable, and while you could adjust the percentages accordingly you’d still have to wager a high proportion of your bankroll across the four bets. Adjusting the percentages proportionately in this way may also undermine the value proposition of the bet, while it could become a little complex if you place multiple wagers regularly.
With this in mind, the best solution is to use a fractional method that sets a low percentage of your bankroll for every individual bet that you place. You could even tailor this in relation to the maximum number of bets you’re likely to place in one sitting, as this will ensure that you’re unlikely to exceed 100% of your available bankroll even during busier periods.
The Last Word
There are some clear and obvious takeaways here; not least the importance of understanding the fundamental principles of bankroll management and recognising each wager’s unique value proposition.
This comprehension enables you to alter the value of your stake in relation to the odds and probability associated with a particular bet, which in turn optimises the longevity of your bankroll and minimises the risk of significant loss.
By also starting small and implementing a conservative fractional betting strategy that allows for multiple bets to be placed at the same time, you should be able to strike the ideal balance between getting the most of your bankroll, bridging the gap between risk and reward and ensuring that you enjoy a satisfying betting experience!
We hope this advice was helpful, and if there’s anything that you think we may have missed feel free to let us know your thoughts below!