An Introduction to Bankroll Management for Sports Betting
Bankroll management is a relatively new term to world of betting & sports gambling. Bankroll management or BM for short is, simply put, how much you bet per play. The issue is that many bettors (90%+) have no bankroll management at all, meaning they will lose a lot of money in the long run from continually going broke when they hit a cold run and trying to have the “one big win” to recoup all the losses previously. This is the single reason why bookies and betting companies are so successful and profitable.
Both of the below management methods that we talk about in this article were actually started in the profitable trading/investing firms. It was a way they could mitigate risk, whilst at the same time make profits for their clients. It was also a way for them to show individual prospects what they could do regardless of the financial figure in play, instead they were related to “unit” or “% BR” which is exactly what we are going to talk about today.
There are generally 2 ways in which you can establish correct bankroll management. One method is called the unit approach. This involves placing a specific financial amount (say $10) on every bet. This means you will place a bet of $10 at odds of +100 (EVS) or greater and you will place MORE (to profit $10) on odds less than this. For example, if you wanted to place a bet at -200 or 1/2 on, then you would simply lay $20 on the bet, to return a profit of $10. This is generally seen as the easiest way to ensure (assuming your picks themselves are profitable) you make a profit at the end of the year.
The second method is the “percentage bankroll”. I’m sure this has a fancy name but I haven’t personally found it. This method involves placing bet amounts based on how much you have in your bankroll. For example, if you have a very strong bet you may place 3% of your bankroll on this bet. If you have a less confident bet maybe only 1% and a max bet would be in the 5% region. Generally, this is seen as the best way to calculate bet amounts, simply because your account grows proportionally throughout the year. For example, when you go on a winning streak a 3% bet will be a lot more money than a 3% bet in the previous month. This strategy works well for longer term profitable bettors, whilst at the same time if you are going to blow your entire account it will take a very long time as each time you are betting less and less than before.
How much capital should you start with?
Unit BM technique: This depends on the size of your unit. For example, if you selected a unit size of $100 then I would recommend a bankroll of ATLEAST $3,000. In many cases people, would say to start with $5,000. Again, this does depend on the quality of your picks. If you are only an amateur bettor and aren’t following anyone “guaranteed” to make you a profit, then I would recommend either starting with a lower unit amount or increasing your starting capital. And as always remember to never bet more than you can afford to lose. But hopefully with the unit approach this would be very difficult anyway. This is the bankroll management technique we use for our NHL tips service so it’s one you must learn before becoming a VIP member.
% BR technique: Again this doesn’t actually matter and should depend on how much you can afford to lose…. Although I believe that statement, I do think you should deposit a relatively high amount of money depending on your personal situation. For example if I make $100,000 a year I would probably deposit around $10,000 and use 1-3% per bet. This is proportionally correct to my earnings. Some people might say this is too high, but personally I think the issue in this case would actually be the confidence in your picks rather than your bankroll management. For example if you played 3% of your BR on every single pick and lost EVERY SINGLE BET you made (assuming 3 bets per day) it would still take you over 3 months to lose all your money…. And of course losing 200 bets in a row is impressive in itself.
In More Depth
There are obviously advantages and disadvantages to both methods. The unit method is very beginner friendly and if you do not have bankroll management techniques previously then I would highly recommend getting started with this. The primary advantage to our unit method is that anyone can chose a unit that suits them and run with it for a specific period. For example, $1, $10, $100, $1000, $10,000 per bet. Obviously for stronger bets you can still have 2/3 unit plays and for weaker ones you can still lay 0.5u on a bet.
The primary advantage for % BR technique is that your overall bankroll will increase proportionally to how well your picks do. When it comes to units the main issue is when to increase your unit size and by how much. You need to accommodate the hot and cold streaks that all bettors go through and your bankroll management needs to mitigate the risk of this as much as possible. My personal advice is to increase your units when you double your bankroll. For example if you start with $3,000 with a $100 unit, once you reach $6,000 you should increase your units to $200. But remember if you are less risk adverse you can also go to $150 per unit and still gain some of the ROI benefit.
In conclusion, it doesn’t really matter what your unit size or bankroll is. The only element that needs to be in place is SOME SORT OF BANKROLL MANAGEMENT. There are more complicated ways to place bets and how much you should be placing, such as the KELLY criterion. There is a good article on Pinnacle about this topic if you want to go more advanced. But as long as you have profitable picks, keep discipline and have correct bankroll management you WILL profit in the long run.