A Beginner’s Guide to Bankroll Management

A successful long-term sports-betting career requires many things, least of all a disciplined approach to bankroll management.

There are a number of pitfalls that can beset a newcomer to the sports-betting world – and they can all add up to you losing your money quickly.

In this guide we will:

• Outline the concept of bankroll management;
• Explain why managing your bankroll is so important, including how it prevents us from making rookie errors;
• Introduce you to the concept of Units as they relate to your bankroll, and what this means for your wagering;
• Look at some of the basic staking strategies you can use to protect your bankroll; and lastly
• A word on how important it is to track your progress accurately.

Once you become more familiar with sports betting in general, there are more complex strategies out there, but we can explore those later.

What is bankroll management?

Before we talk about how best to manage it, let’s start by defining your “bankroll”. Your bankroll is, quite simply, the amount of money you have to play with.

Setting your bankroll

If you intend to make sports betting a prolonged endeavour, and keep it in the realm of a recreational pastime, it’s important to budget for it just like you would any other hobby.

Adopting a new hobby usually incurs some sort of cost – maybe it’s a set of golf clubs and club membership. Or a new workbench and some tools to build your dream backyard barbecue setup. Similarly, your bankroll should be disposable income that you can afford to play with. If you burn through it, your life shouldn’t be greatly impacted.

Of course, our goal here is not only to manage our bankroll, but to grow it – so we can enjoy our sports not just as fans, but with the extra thrill of knowing we’ve got a little bit of extra interest riding on it.

Managing your bankroll

While the thrills and spills of sports betting may be the fun bit, if we want the good times to last there will, inevitably, be the flip-side of having to do the more disciplined stuff. Think of it as doing the admin, which also includes tracking your bets.

Sports betting isn’t easy to do profitably over time. Taking into account the vig charged on a standard -110 point spread, you need to win 52.38% of your bets simply to break even.

Even professional sharp bettors struggle to win close to 60% of their bets – so maybe here’s the first lesson you must learn: be prepared to lose. A lot. Or, at least, almost as often as you win.

The concept of bankroll management includes first and foremost, making smart bets – so if you haven’t yet, be sure to read our introductory articles on various bet types (including Moneyline bets, Point Spreads, Totals bets, Props and Outrights) and learn about finding value.

Second, there is an element of staking reasonable amounts relative to the size of your bankroll, such that it will out-live your inevitable loses. There are different staking strategies available to you, which we’ll explore with you below.

Why is managing your bankroll so important?

On the simplest level, if you are disciplined in your bankroll management, it forces you to bet responsibly. This means you bet within your means and never lose too much at any one time.

Essentially, managing your bankroll diligently will protect you from yourself, and the natural urges that come with gaming:

• If you’re on a losing streak, you can’t chase your losses
• If you’re on a winning streak, you can’t get too carried away and bet too big
• It means we can handle our losses without having to reload our bankroll, and
• Over time, it teaches us how to make better and more rational betting decisions.

How all of this works will become clearer as we continue to explain how bankroll management works.

“Unit-ize” your bankroll

Let’s assume that our bankroll is $1000. That’s an amount that we’re comfortable playing with and, while we’d rather grow it, we’d survive if we lost it. (Although we’d probably regret the golf clubs we didn’t buy, or the barbecue we didn’t build instead.)

Now, let’s take our bankroll and break it up into units.

Here, you face a simple question around how much risk you are willing to adopt at the beginning. With your $1000 bankroll, are you happy with say 2.5% risk on any given bet? Maybe you should start lower?

• $1000 split at 2.5% per bet gives you 40 units at $25 each.
• Or maybe you would prefer 100 units at $10 each. Start slowly and build… could be sage advice.

In any practical sense, the actual value or dollar size of that unit is unimportant, because it serves its purpose relative to the size of your bankroll.

The good news is, whatever you decide you can always revisit – just be sure that consistency comes first.

When it comes to figuring out how much you should wager on any given bet, you now make a decision based on the number of units, not a dollar value.

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Staking Strategies to Help Manage Your Bankroll

There are a number of different approaches you can take to managing your bankroll. As you go, you will likely develop a preference or a level of comfort with one over another. There is no right or wrong here, only a requirement that you do.

In other words, find your own way by experimenting and exploring your options, but be disciplined in your decision-making process.

We’ll start with the more straight forward fixed staking strategies – flat betting and percentage betting – before looking at two variable staking strategies – trust, or confidence staking and, briefly, the Kelly criterion.

If you are relatively new to sports betting, or a complete novice, we recommend sticking to a fixed staking strategy.

Exploring variable strategies should come later, with a better understanding of the environment, the mechanics (and mathematics) of betting, and a better intuition of how to operate.

Flat betting

Flat betting, or “level betting”, is the easiest way to get comfortable with the idea of bankroll management. It is a fixed staking strategy.

Quite simply, it requires you to bet the same stake for all your wagers.

As a starting point, you need to chose a level of risk you are comfortable with on any one bet. Usually it is advised that this be in a 1% to 5% range. If we set this in the middle for illustrative purposes, then a 2.5% unit equals $25 from our $1000 bankroll.

Every bet we place is therefore $25, regardless of the odds on offer. At a standard spread of -110, we are happy with the 0.91 unit return.

This discipline protects you from chasing losses – i.e., betting more in the hope of quickly recouping losses – or getting carried away on a winning streak when you’re tempted to bet more (because you can’t lose, right?! Hate to break it to you – You can. And will, eventually.)

One disadvantage of a flat-betting strategy is that it does not account for past wins or losses, and only looks at staking an equal unit amount on the next bet.

If you are successful (winning more than 52.358% of the time), your bankroll will grow over time. This means your unit size as a percentage of your total bankroll, will shrink. Of course, should you lose, then each unit becomes a greater percentage of your total bankroll, which may quickly start to feel like you’re chasing losses.

Over time, this will mean that when you win, you may win less (per bet) than you might have. On the flip-side, when you lose you get to live and fight another day. And while it may take longer to dig out of a hole, at least this ensures you’ll still have a shovel to use.

Percentage staking

In percentage staking, it is the percentage of your bankroll that you chose to risk that is fixed. Let’s stick with the 2.5% comfort zone we identified earlier.

That 2.5% is $25 on your $1000 bankroll. Or, 1 unit = $25.

Now assume you’ve managed to grow your bankroll to $1500. A 2.5% unit is now worth $37.50, and that would be your new stake.

Alas, it happens to the best of us, but assume you hit the skids and have a bad run. Your bankroll drops to $800, at which point 1 unit = $20. At $500, 1 unit = $12.5 and so on.

Pros and Cons

Adopting a percentage staking strategy allows your stake to slide up and down in line with the size of your bankroll – removing the need in a flat-betting strategy to reassess unit size.

While flat-betting the same unit size may limit the amount you win per bet, percentage staking allows you to take advantage of your winning streaks as your stake grows.

On the flip side, when you’re losing and using a flat-betting approach, your stake grows relative to your bankroll, allowing you to get out of the red quicker. When percentage staking on the downside, it’ll take you longer to recover because your stake moves lower in conjunction with your bankroll.

Either way, both strategies demand discipline and mean that, if you stick to them, you will be gaming responsibly. If you’re betting on a sport you know, over time, both strategies should allow you to be profitable.

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Trust, or Confidence staking

Using a trust, or confidence staking methodology adds another layer of decision making to each bet. This is a variable staking strategy as you increase your stake relative to your level of confidence in the outcome.

First, you need to create a scale against which you feel comfortable measuring your level of trust, or confidence. Some recommend a scale of 1-3, while others like to use 1-10. Some tipsters, especially in Europe, use a scale to 100.

Let’s keep it simple and say 1 is a low-confidence outcome, 2 is mid-confidence and 3 high confidence. (If you were using a scale to 10, the subdivisions would be 1-3, 4-6 and 7-9, with 10 reserved only for guaranteed wins or sure things).

This staking strategy allows you to optimize returns by betting 1 unit on a low-confidence bet, 2 units on a mid-ranking bet and 3 units on those bets you feel highly confident on.

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The Kelly Criterion

The Kelly criterion is a more advanced variable staking strategy, recommended not for beginners but for sharper bettors. That said, we mention it because it pops up when you Google anything related to bankroll management in sports betting.

What’s more – some sharp bettors and bookmakers themselves swear by it as the best way to mange your bankroll.

As this is a Beginner’s Guide, we won’t delve into the details here, but you do first need to understand expected value and how to find it.

While the confidence strategy assigns each bet a confidence value, the Kelly method requires an exact winning percentage for each. When applied to the formula, it then tells you what percentage of your bankroll to stake.

Clearly, this isn’t an easy task for a newcomer, and even sharps will struggle to calculate an accurate winning percentage. If you are off even a little, the impact on what your stake should be can be large.

Compound that with the idea that if you can’t accurately gauge a bet’s winning percentage, your success in sports betting is likely to be very short-lived if you are staking too much.

In short, for the time being let’s not try to run before we can walk.

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The Importance of Tracking

If you intend to make sports betting a legit pastime, you can’t underestimate the need to track your bets. While the size of your bankroll is your bottom line, if you want to learn, improve and get sharper, then you need to know more about how well your decisions have played out.

Are there certain sports you’re doing way better in than others? As a general rule, it’s wise to keep your betting to sports you know well. Are you doing better in Moneyline, Spread or Totals bets?

Testing your intuition with the confidence staking strategy described above is a great example of this playing out in a very practical sense.

Old-schoolers might want to open a spreadsheet to do this, but there are a bunch of apps available online to help you track your bets and progress.

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In conclusion

So that’s out Beginner’s Guide to bankroll management. The key takeaways:

• Be disciplined – this will allow you to bet smart and responsibly.
• Staking strategies will protect you from yourself – and make your bankroll last.
• Remember to unitize your bankroll.
• Fixed staking strategies mean you bet the same amount each time, either in terms of unit, or percentage.
• Variable staking strategies are for the more advanced bettor. There’s no rush. Learn to walk before trying to run.
• Track your results so you can live and learn – and play smarter, for longer.

Good bankroll management isn’t just important, it’s crucial.