Money Management Strategies for Sports Betting
Becoming a successful sports bettor takes more than just making good bets, it also requires strong sports betting money management strategies.
Picture this: it’s Sunday night and you’re watching the last football game of the day. You bet the underdog which is down by six points in the fourth quarter. As the clock ticks down and your team drives the field, your heart is pumping as you cross your fingers in hopes of pulling off a big upset.
Sure enough, your team pulls out a huge fourth-quarter comeback, resulting in your biggest win of the day.
You’ve scored a big win but how do you make sure you’re smart with your profits? Money management strategies are ways to maximize your chances of continuing to win while minimizing your risk of losing it back. These bankroll management methods are extremely powerful and they’re an absolute must for winning gamblers.
On this page, we’ll clearly explain everything you need to know about how to manage your sports betting bankroll, easy to follow tips and strategies, and important things like win and loss limits.
What Is Bankroll Management and Why Is It Important?
All across North America, online sports betting is becoming more and more common. Betting on sports can not only enhance your viewing experience, but you can also make money by doing your research and playing the odds.
Gamblers love the thrill of being in high-risk, high-reward scenarios. Making big, risky bets is a good strategy if you want to get the blood pumping and the adrenaline flowing but if you don’t have a plan, it will eventually end in disaster. That’s where money management strategy comes in.
There are lots of things you can do to give yourself the best chance of coming out on top and that’s exactly what we’re going to teach you on this page.
The concept of bankroll management is one of the most valuable sports betting strategies you can learn. It has to do with the amount of money that you’re able to invest in gambling at a particular time and how you choose to invest it.
Many of us have to put together a monthly personal budget that accounts for our expenses, set limits as to what we can spend, and maybe even helps us build our savings. Bankroll management in gambling operates in the same way.
If you only have $1,000 to gamble on a given weekend, it would be poor bankroll management to put everything you have on the first game and potentially walk away empty-handed.
Here are some of the other terms that tie into bankroll management:
- Betting Bankroll: Lots of gamblers set limits on what they are willing to bet in a day or a week, for example. This is different than your total bankroll which should never be put at risk on a given day or week.
- The Pot: Synonym for Betting Bankroll.
At the end of the day, you only want to use money in your bankroll that you can afford to lose. Even though it sounds simple, there are some who choose to gamble instead of paying bills. Practicing good bankroll management will guarantee you’ll never be in that position.
Tips for Sportsbetting Money Management
1. Play Within Your Budget
If you’re a recreational sports bettor, not betting too much is a really important lesson to learn. You should only gamble with money you’re comfortable losing. That way it’s always going to be fun and you don’t have to stress unnecessarily about a bit of bad luck.
The goal is to have fun and enjoy the experience. If you’re risking money that you can’t afford to lose it’s never going to be fun.
2. Have a Separate Gambling Bankroll
This is a lesson many gamblers learn and never actually put into practice but it’s really important. Separate a certain amount of money from your personal finances and make a plan not to spend more than that on gambling in a certain period of time, whether it’s a week or a month.
When you’re dipping into your personal bank account every time you make a bet it’s really easy to lose track of your overall wins and losses. It’s also way easier for your gambling to negatively affect your overall finances if you’re not keeping track.
Bill Krackomberger talks about how important bankroll is, on our Wise Kracks sports betting podcast.
3. Don’t Take Money from Your Bankroll
The best bettors in the sports gambling world work on slowly building up their bankroll over time. One big way they do that is by not withdrawing money from their total bankroll every time they chalk up a win.
You should be gambling on sports for fun, and a big part of that is by using the money you win to buy something or do something fun. For that reason, you can have some leniency here in terms of taking from your bankroll, especially if you’re just an occasional gambler.
However, if you want to become a better sports gambler and work your way up to making truly big wins, it’s really important to keep as much of your winnings in your bankroll as possible. Money is like ammo for gamblers and the more you have, the more damage you can do with your bets.
4. Keep Detailed Records
What good is bankroll management if you don’t know how much money you have in your bankroll, or how much you’ve won and lost in a given month?
This might sound like a simple tip but it’s definitely one that is vastly underutilized in the sports gambling world.
Tracking your bankroll management and bets is also a quick and easy way of keeping track of your betting history. This can help you review your past bets, to give you an idea of where your successes and failures came from in the past. You can do this in an Excel document, or even in a good old fashioned notebook.
Look at where your profits are coming from. What sports, teams, and bets are making you the most money? Alternately, where are you taking most of your losses? It takes some work but by focusing on your strongest areas and avoiding your weakest ones, you can make a massive difference to your bottom line.
How Much Should I Bet on Sports?
How much you should bet on sports depends on lots of things and it’s different for everyone. One thing that’s the same for everyone, however, is that it’s really important to be consciously aware of how much you’re betting and how it relates to your overall finances.
With online casinos and sportsbooks making it easier and easier to gamble, it’s now more important than ever to set aside a separate budget for gambling. It’s really common for beginner gamblers to take money right out of their regular bank account each time they make a bet. If things don’t go their way in the beginning, the sting of losing can turn them off of sports betting in general.
One great way to make sure that doesn’t happen to you is by asking yourself that one question: how much are you willing to lose? Separate that money from your regular day-to-day cash and mentally tag it as money you’re spending for recreational entertainment.
Prepare for the Worst
We’ll explain the best strategies for diversifying your bets and generating income later on but in sports betting, there are never any “true” guarantees. Even teams like the Browns win eventually.
By setting aside a budget for gambling every month, you can protect yourself from runs of bad luck by minimizing your losses. Once you eventually do start winning, your bankroll will still be intact so you can take advantage of the good luck.
There are always ebbs and flows in betting, so always set a ceiling on your spending so you don’t stress out too much during the rainy days.
Work for the Best
It’s easy to get jealous of those who are blessed with beginner’s luck in gambling. Whether it’s picking based on logos or team names, chances are you know someone who’s won their pool with no experience whatsoever.
While a lucky play can induce jealousy, long-term success at sports betting is all about putting in the work and research that will pay off time and time again. After establishing a bankroll and a budget, the building blocks are in place for using that hard-earned cash to find value in your bets.
Combine Bankroll Management with Value
We’ve established that maintaining and tracking your bankroll is one of the single most important aspects of sports betting. Deciding on a responsible amount of money and setting it aside for gambling is crucial if you want to start off your sports betting career on the right foot.
The second-most important aspect of gambling is finding value in your bets. It takes experience, good statistical research, and even building stats models in order to find good value. And once you make good bets, hedging these value bets is another powerful and prudent way to invest your money in sports betting.
Once you’re able to find value bets within your sports, it becomes a matter of how much of your bankroll you want to spend on value bets. Diversifying is always a good strategy, but you can also use these strategies to both make smart bets while preserving and growing your bankroll.
Let’s take a look at a few popular ways to do it:
Calculating Bets Based on Units (Set Percentile Strategy)
One of the best ways to preserve your bankroll is to make bets based on units instead of dollars. By this we mean:
- Take your total bankroll and divide it into 100 units.
- If you have $5,000 to gamble, one unit would equal $50.
- When you place a bet, think of those units as a percentile.
Calculating your bankroll as 100 units makes it easier to understand the size of your wager in relation to your total bankroll. A good strategy is to wager one unit on each bet. That way you can make sure that you aren’t eating into your bankroll too much, especially early on as you just begin placing bets.
This is a relatively safe betting strategy, known as the Set Percentile strategy. The safety of it may mean it takes you longer to earn more, but it’s a powerful strategy to adopt if you want to enjoy both longevity and success in the sports betting world.
What Is a Stop Loss Limit?
You might think that winning money is the hardest part of sports gambling, but sometimes the hardest thing is knowing when to stop.
- A stop-loss limit is a predetermined amount you’re willing to lose in a certain period of time. When you reach that number in losses, you stop gambling.
- If you give yourself $100 to gamble within a day, for example, once you lose $100 you stop gambling.
- Self-control is crucial in order to preserve your bankroll and setting up a stop-loss limit strategy helps you reach that goal.
Why Should I Use a Stop Loss Limit?
Not everyone employs a stop-loss limit when sports gambling, and it’s an easy way to fall into a big hole fast. It’s easy enough to type in a credit card number a gamble more money away, which is why it’s important to find practical ways to be diligent with your money.
If you followed our earlier advice about having a separate gambling bankroll you’re already ahead of the game. If not, follow these tips to get a handle on things.
If you’re betting using cash, keep only the cash you want to use in an envelope and keep separate from other ways of taking out money. For debit cards, try transferring the money you want to use for gambling into a specific account.
However, you want to go about it, setting up a stop-loss limit is one way to make sure you preserve your bankroll for future bets.
Types of Stop Limits
Here are some of the stop-loss limit modes employed by the pros.
1. Session Stop Loss
The idea of splitting your gambling into sessions helps you set a certain amount to gamble in a specific period of time. For sports betting, you might set $200 aside for the day, and bet it on 20 different matchups or lines.
The important thing to note is that your session ends once you run out of money, If you want to bet on sports throughout the day, you might want to split your sessions so that you have enough money to last all day even if things go poorly early on.
Just make sure not to dip back into the wallet once the bankroll for your session is exhausted.
2. Stop Win Limit
Deciding when to stop when you’re losing is important but, perhaps counterintuitively, so is deciding on when to stop when you’re winning.
Even the best luck in the world will run out eventually and it’s usually a good idea to quit while you’re ahead and lock in a big win. Creating stop-win limits is also a great way to help you develop your discipline which will help you in sports betting across the board.
Choose an ambitious number and if you hit it, stop making bets and spend the rest of the day counting your winnings.
Best Money Management Strategies
We’ve set you up with a good base for money management so far. You now know what your bankroll is, how you can establish it, and some best practices for managing it.
Now let’s dig into a few more advanced ways to expand your bankroll management toolbox.
Using a fixed staking strategy is the most common way of placing bets. Remember when we talked about calculating your bankroll in units? Well, now it’s time to figure out that calculation before you start using stakes.
Fixed stakes are simply placing the same number of units on every bet.
Say you want to have two sessions in a day and make ten bets in each session. A fixed staking strategy would be betting five units of your daily bankroll for each bet you make. This is generally the easiest way of going about your bets, and you might surprise bookies who might consider this to be a beginner strategy.
Calculating Potential Profits with Fixed Stakes
Your potential profit will vary depending on the odds, but here’s the basic calculation:
Odds (In Decimals) X Stake = Winnings
To figure out the profit just subtract the original bet from your winnings.
Here are the three most common scenarios in which you can calculate potential profit for fixed stakes.
So you’re picking the favorite this time? Safe move. An odds-on bet means that your profit is less than your stake.
Say you place two units on a stake at odds of 1.5 (or 3/2). A win would net you three units, for a profit of one unit.
Say the odds increase to 2.0. A bet of two units would net you four units, for a profit of two units.
These are certainly the best bets to win, both in terms of emotional feelings and monetary value. If you take your two units and place it on 5/1 odds (5.0), then a win would net you ten units, for a profit of eight units.
Using a fixed stake certainly makes it easier to keep track and calculate your bets. It also prevents you from heavily skewing your bets towards either a big gain or a big loss. Essentially, it’s a lower-risk, lower-reward strategy.
Variable staking isn’t hard to grasp, and it focuses on calculating the value in bets. In this way you can put more of your money towards the bets you feel have the best value. It’s higher risk but also comes with a higher potential reward.
Which is Better?
In a nutshell? Neither. Or Both. It depends on your style of gambling.
Fixed stakes are easier to track while variable stakes take a bit more research and allow you more flexibility for what you want to bet on. Neither strategy is proven to be more effective, so it depends on what you want to try for your gambling experience.
Our tip: try with both methods, and track your results. That’s one way to learn which style works better for you.
Best Advice for Money Management
It’s always best to practice good habits when sports betting so that you can turn this hobby into a money-making opportunity. After you’ve set up your bankroll and found a style of betting that suits you, continue with these money management tips:
1. Diversify Your Bets
This goes with the old adage “don’t put all of your eggs in one basket.” In fact, putting your eggs in just two or three baskets generally isn’t a good strategy either.
People who make fewer bigger bets generally don’t want to put in the work and they want a big rush, but these aren’t the guys who enjoy longevity in the sports betting world. The best in sports gambling slowly build up their bankroll by placing a wide variety of smaller bets.
2. Quality Over Quantity
Just because diversifying your bets is a good strategy, doesn’t mean you should just blindly bet on everything that comes your way.
This is where doing research on your bets can put you in a better position to figure out what odds are best. Oddsmakers often make odds not just off of what the research dictates, but how they think people might bet.
The rise of the internet has given everyone the tools to really dig into the data that you think might give you an edge.
3. Stick To Your Plan
If you bet just for fun, then you probably don’t mind losing a bit of money. However, if you treat betting more like a business, then it’s easier to both win money and manage your bankroll.
Sticking to the plan may sound simple but the truth is, this is where most people fail. A lot of people know what they’re supposed to do, whether it’s stopping after losing a certain amount or keeping their bet sizes low, but that doesn’t mean they actually do it.
Making a plan doesn’t mean a thing if you don’t stick to it when it counts.
What is the Kelly Criterion?
Ever since the Kelly Criterion was founded more than 60 years ago, it’s been widely considered one of the best strategies for maximizing bankroll growth. Whether it’s the best strategy or not is up for debate, but the popularity of the Kelly Criterion is hard to deny.
The Kelly Criterion was developed by AT&T Bell Labs researcher John Kelly in 1956. It compares the perceived odds of a bet winning with the payout odds offered by the sportsbook to tell you how much of your bankroll you should wager on that bet.
How Do I Use the Kelly Criterion to Bet?
We’ll get into the equations used to figure out how much of your stake you should use in a bet, but here’s the simplistic version of how the Kelly Criterion works.
Say you’re about to place a bet on a coin-flip which has a 50% chance of winning. The person you’re betting against really wants the action and is willing to pay 2 to 1 odds when you win.
You shouldn’t need any special math to see that this is an amazing bet that you should take all day long. The Kelly Criterion is a way to analyze bets that are less clear.
The easiest way to use the formula is to find a free Kelly Criterion calculator online and plug in the numbers to see how much you should bet. If the odds work out poorly, the Kelly Criterion will tell you not to bet at all.
Speaking of Staying Away From Bets…
There is a well-known flaw involving the Kelly criterion. Often, the math could work out to tell you that you should be betting 20%, 30%, or even 40% of your bankroll.
The Kelly Criterion is designed to take advantage of good odds and it will often tell us to bet a huge chunk of our bankroll. The downside in real life is that if that bet fails it will take a huge bite out of our bankroll.
Just remember that when it comes to the Kelly Criterion, it’s best to use it as a general guide rather than following the numbers no matter what.
Let’s dive into the different components of the Kelly Criterion so that you can start using it for your own bets.
Manage Your Bankroll for More Betting Profit
Studying and understanding everything in this article will give you a firm grasp on the basics of sports betting money management.
We can’t emphasize it enough: managing your betting bankroll properly will pay off huge in the long run. Not only will it help you win more money, but it will also take a lot of stress out of the entire sports betting experience.
Proper money management also lets you track your results in a much more objective way. You won’t have to guess about how much you won or lost in a given month which lets you be a lot more realistic about your results.
If you live in a state where sports betting is legal, you can put your new bankroll strategies to work right now.