JUMP TO:
- What is bankroll management in sports betting?
- Why bankroll management matters for long-term success
- Popular bankroll management systems, explained
- Pros and cons of different bankroll strategies
- How to choose the right system for your betting style
- Tips to stay disciplined with your bankroll
New bettors have a lot to navigate, and there are many different strategies to learn before they become successful. Perhaps the most important skill, though, is bankroll management.
If you're not managing your money effectively, win or lose, you're asking for trouble. Bankroll management strategies help you establish a plan for how much money you can afford to risk, how much you should be spending per bet and how to have impulse control.
With anything involving money, we need to exercise discipline. Here's everything you need to know about bankroll management, and why it can serve as an imperative skill during your sports betting journey.
MORE: Complete guide to betting on the NFL
What is bankroll management in sports betting?
Bankroll management is the practice of setting, organizing and controlling the amount of money you're willing to spend on sports betting. It's a crucial skill for responsible and disciplined gamblers, helping to stay in control and prevent negative actions like poor-impulse and on-tilt bets, overspending and loss-chasing.
Just as you and your family actively manage your budget, you should be managing your bankroll. Treat your betting funds as investment money, and be sure to only deposit what you can afford to lose. This should be an entertaining hobby that hopefully helps make you some money — don't let it become a financial strain because you lost control or never had a plan.
MORE: What to know about betting on the NBA
Why bankroll management matters for long-term success
If you actively manage your bankroll, you will likely avoid the pitfalls many new bettors experience. Establishing a betting budget early keeps you from losing too much, too fast and helps you learn from your mistakes. Maintaining a betting budget greatly increases your chances of succeeding in the long term.
Popular bankroll management systems, explained
To learn effective bankroll management, bettors must also learn some different terms, strategies and systems. We can't master a skill without knowing what goes into that skill! Learning the lingo helps us understand the system, and getting the definitions down gives us a firmer grasp of day-to-day discipline skills.
Units betting
We can't understand bankroll management if we don't understand the concept of units. It's like trying to save or invest money without knowing how much each unit of currency costs.
Units are a standardized measurement used to determine the size of a bet relative to your bankroll. A unit is typically a percentage or specific amount of the total bankroll that a bettor feels comfortable risking on individual wagers.
Using units allows bettors to effectively manage their risk vs. Reward every time they make wagers. It helps form self-discipline and self-budgeting habits that can be crucial to long-term success (or, at least, avoiding long-term turmoil).
Bettors with $200 bankrolls should start with a 1% or 2% unit size, which is $2 or $4. Once you build your bankroll up to the $1,000 level, you might consider bumping your individual bets up to $10-$20 per wager.
Think of it like you're just learning poker. You're probably not jumping on the table with $10 or $20 blinds and antes right away — you want to start at the $1 and $2 tables. Once you get the hang of poker and stack up some big winnings, you might want to graduate to the bigger tables and try to boost your bankroll even more.
Units also help bettors and betting analysts approach different wagers appropriately. If a bettor or an analyst feels particularly confident in a bet, they might wager or suggest wagering five units on that bet. If less confident in a bet, they might opt to bet just one unit or even a half-unit. This goes back to the concepts of risk vs. Reward and return on investment (ROI).
MORE: Why bettors should utilize multiple sports books
Flat betting
Flat betting refers to a bettor wagering the same amount for every bet they make. It's a method of ensuring consistency and not losing too much. Beginning bettors often engage in flat betting to stay disciplined and make their early bankroll last a little longer. You can even set up bet limits on your sportsbook so that you can never bet over your flat rate.
Kelly Criterion
The Kelly Criterion, conceptualized by John L. Kelly Jr. In 1956 to help horse bettors, helps determine how much to wager on each bet to maximize wealth growth over time.
It's basically a calculation that takes into consideration winning probability and win/loss ratio. The Kelly Criterion follows two key components in its formula:
- Winning probability factor (W): The statistical probability a bet will yield a positive return.
- Win/loss ratio (R): Equal to the total positive bet amounts, divided by the total negative betting amounts.
The result tells investors what percentage of their total bankroll should be applied to each bet. The term is often called the Kelly Strategy, Kelly Formula or Kelly Bet.
Martingale strategy
The Martingale is a betting strategy where a bettor doubles their bet after every loss. The objective to recover previous losses with the first win and secure a profit equal to the original stake.
The Martingale is most commonly used for games with a nearly 50-percent chance of winning, like betting on a team with -100 or +100 odds (coin-flip).
Many criticize the Martingale strategy, especially because chasing losses can be quite risky. If you're losing money, you should avoid potentially multiplying your betting debts and digging your bankroll hole deeper. Betting should be a marathon, not a sprint.
MORE: Everything to know about odds in American sports betting
Pros and cons of different bankroll strategies
Let's take a look at some the positives and the negatives that go along with the most popular betting systems.
Units betting
Pros:
- Easy to understand and execute
- Standardizing bet size helps mitigate risk
- Takes emotion out of the equation, reduces impulsive bets
- Allows for steady growth, while minimizing big losses
- Easy to track performance
Cons:
- Slow bankroll growth
- Takes strong discipline to stick with consistent unit size
- Unit size may need adjusting over time, but sometimes goes overlooked
- Doesn't maximize edges when you see strong advantages
Flat betting
Pros:
- Easiest and safest long-term system
- Protects bankroll by avoiding large swings
- Limits losses during cold streaks
- Keeps bets consistent despite confidence level
Cons:
- Leaves meat on the bone with high-confidence plays
- Slower bankroll growth
- Doesn't optimize for when you have edges or spot advantages
- Requires patience
Kelly Criterion
Pros:
- Proven to maximize long-term bankroll growth
- Scales with your edges, allows for bigger bets when you identify value
- Minimizes risk from many other progression systems
Cons:
- Requires calculations to come up with bet size
- Overestimating edges can lead to big losses
- An aggressive but volatile system
- More complex than unit and flat betting
Martingale strategy
Pros:
- Easy concept to understand
- Wins guarantee recouping losses
- Can work well over the short term
Cons:
- High risk of major losses during losing streaks
- Requires big bankroll to sustain progression
- One bad streak can wipe out months of profits
- Long-term expected value is negative
- Considered a better system for cards and table games than for sports betting
MORE: 10 common betting mistakes made by new bettors
How to choose the right system for your betting style
Every bettor is different, just like everyone's finances are different. So, determining your bankroll management system and ultimately your betting style will depend on your individual goals, skills and abilities.
Consider trying out a couple different methods in the early going. The Kelly Criterion is an important strategy for every bettor to get to know, but obviously not all sharps follow the Kelly model for the entirety of their betting careers.
The most important thing is to avoid going too far in the negative direction. Set limits for yourself on sportsbooks, with both per-bet maximums and per-week/per-month maximums. In the end, you are the only one who will truly look after your betting investments and influence your long-term prosperity. Play it safe and always have a plan.
MORE: Key sports betting terms every beginner should know
Tips to stay disciplined with your bankroll
Here are some good bankroll guidelines to follow throughout your sports betting journey:
- Establish your bankroll: Determine how much you can afford to lose. Ensure you use disposable income only and always prioritize your important life expenses.
- Keep betting funds separate: Don't mix your betting funds with your personal finances. This will keep you from overspending your bankroll.
- Set your limits: Go into your sportsbook and set limits on your bets as well as your weekly and monthly betting amounts.
- Don't chase losses: When you lose, don't try to make up for the loss with a bigger bet or a wager you haven't researched. Don't go on tilt and let emotions and poor impulses take over.
- Bet with your head, not your heart: Always weigh the risks. Don't bet because you're trying to dig out of a hole. Avoid betting too much on a team you love or have rooting interest in.
- Pace yourself: Successful betting is a marathon, not a sprint.
- Track your activity: Sportsbooks provide detailed monthly reports and lifetime records of your winnings and losings. Monitor what worked and what didn't work. Avoid repeating history and making the same mistakes.
- Stay away from big parlays: No matter your unit size, parlays are sucker bets. Try to avoid helping the sportsbooks out and falling down the parlay trap. The path to long-term betting success is paved in individual bets!
Popular sportsbooks that may be available in your area
Even if sports betting is legal in your state, not all sportsbooks may be available to you. Here are some of the most popular options to look into: