Fixed Bet Size Money Management Strategy

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Maybe the single most important part of being a successful sports better is proper money management. This aspect of the game is often overlooked and drives many betters into the poor house. While simple in explanation, proper money management is far more difficult to follow.

For starters, we must define our objectives. Some people bet on sports as an investment, to make a living. Others put $100 on their favorite footy game of the week for entertainment value. We are talking about two completely different things. The person seeking entertainment will lose about $5 a week if he can go 50/50 on the whole year. This loss is the vigorish or bookies cut of the action. Professional bettors must approach things in a different manor.

To be a professional gambler you must approach things with a business attitude. You have costs, you have revenue, and in the end, hopefully, you have profit. Approaching the industry in any other way will surely leave you in the poor house. The first step in betting professionally is proper money management. This article explains why fixing all your bets to a standardized unit is the most profitable and sensible way to bet on sports.

There have been many different money management systems over the years, some with quite interesting approaches. The more common ones are star-betting and the Kelly Criterion, both advocating varying your bet size. There is tremendous debate about these different systems. This article presents the argument for fixing your bet size to a percentage of your bankroll and only changing that bet size after large fluctuations in your bankroll. This system was heavily argued for by the late R.J. Miller. An article illustrating the benefits of the Kelly Criterion is in the works.

True professionals with years in the business can consistently pick around 56% winners. They have years where they pick 54% and they might have years where they pick 58%. After betting 1000+ games a year, for many years, the best can get it right about 56% of the time. This winning percentage can yield long-term profit when the money is managed properly.

Let’s look at some simple math. If we pick winners 56% of the time and bet 100 games, we will win less than 50 games 17% of the time. We will win 60 games or more about 17% of the time. Let’s say we won exactly 50 games. If you were betting 5% of a bankroll, say $50 out of $1000, you will lose a quarter of your bankroll to vigorish by the time you finish the 100 games ( 50 wins times $50 minus 50 losses times $55 = -$250).

Some touts argue that you should vary your bet size depending on how you are doing. In this case, where you broke even on wins and losses over 100 games and lost a quarter of your bankroll on the vig, if you lowered your bet amount you would never get even. This is why experts recommend keeping your bet amount a constant 1% or maybe 2% of your bankroll when betting professionally. This small percentage of your total funds available to bet will help lower the severity of the swings and let you survive the cold times.

When properly managed, sports betting can yield an unbelievable ROI of near 100%. Let me explain how to arrive at this number:

Professionals make about 1000 picks a year. Additionally, so that what they are doing will yield a decent payoff, they try to bet a minimum of $500 a game. If they are using 1% to define their unit, their bankroll must be $50,000. Winning 56% of their plays, professionals can make near a 100% return on investment. Simply speaking, they win 560 games and lose 440. They will end up paying the sportsbook a fee of 44 units (See the article on Vigorish ). 120 units minus 44 units leaves us with 76 units, or 76% return on investment at 1% units. When your bankroll increases or decreases by 25%, that is the time to recalculate your unit using the 1% rule.

We hope this helps!

Sources: R.J Miller