Bankroll Management
There are many aspects to gambling on sports. There are different types of sports, many types of wagers and one should be good at team analysis. There is also the number you have to beat. Remember this, novice gamblers bet teams, pro gamblers bet the best number as it provides the pro with a positive expected value (EV). The real issue becoming successful is that you can do all this right and still be a loser. One might wonder, "how is that statement true?" The answer is bankroll management. It is a Wednesday night and you have selected a "lock" can't miss game based on all the proper analysis from above. You have a great line and positive EV. However, the game is in the 3rd inning with your team ahead by 2 runs. All of the sudden the rains come pouring down producing a 2.5-hour rain delay. When the teams come back out, they both have new pitchers. Your team doesn't respond well and they end up losing the game by 1 run! There are no guarantees in sports betting. You can do everything right and still have something happen. If you properly wagered on the game, you will not take a big hit to your bankroll, but if you are like the masses, you probably stepped way out and wagered an amount over your bankroll means and now are trying to figure out how you are going get out of this hole you find yourself in. If you want to become a successful investor in sports games, you must determine the proper strategy for managing your bankroll. This is a separate skill set that is required and one we will further discuss.
Your bankroll is defined as monies dedicated to placing your wagers on the games. It is not your rent money, not your electric bill money, nor is it you car payment money. The sole purpose of this money is to wager on games. You must first decide how much money you have for a bankroll. This should be a relatively easy task. You know how much "extra" money you have, use it to fund your bankroll.
Now we have an established bankroll to use. We must determine the appropriate way to manage this fund. It starts by determining what kind of risk taker you are. Determining that is easier than you think. If you were to deplete your bankroll, would you be able to make a new one or would you be done gambling for awhile until you could get back in the game? Simple question, yet the answer is important. If re-establishing your account is no problem, then your first risk taker profile is high because you can always re-up at any time. If you cannot re-establish your account, then you have a low risk taker profile. Since you must play to stay in the game, you will be somewhat working backward. All of your wagers must consider your total in the account before you make them hence working backward. A couple of simple examples. Player A can re-up his bankroll and he starts with $500. He can wager 5 games at $100 each anytime he likes. Player B cannot re-up his bankroll for 5 months. He is in a position where he needs to determine what percentage of his bankroll he can afford to risk for the day so he is not in jeopardy of being out of the game. Let's say he wants to bet the same games as Player A and has the same amount of his bankroll. He may decide that 20% of his bankroll being exposed at any given time is his threshold so he can only wager $125 for the day which also means he can only put in play $25 per game. Huge difference right?
Now we have established the main risk profile of the player, we must determine the purpose of wagering in the first place. We must do this so we can then set some parameters and realistic goals. There are many reasons why we gamble on the games. Some have expendable income and want to make quick money fast, others want to establish a routine and grow their bankroll like a savings account would grow incrementally. If you are not worried about losing then wagering larger and wagering on many opportunities could be a perfect style for you. Your returns on wins will be higher but your wins will be fewer, so the idea is to win the larger bet games and the highest odds games to maximize those wins. If you are growing or grinding your account with disciplined wagers, you will have more wins but not get rich quick. Your bankroll will grow incrementally but at a higher percentage rate than in a savings account. This style will also allow you to accept any losing streaks that happen to everyone. Your results should be judged over months, not days or weeks. Just like the stock market or any other investment options, sports wagering is volatile and will have many ups and downs. Most novice wagerers find this frustrating and it generally leads to their demise.
We now have determined your bankroll and your style, so how do we establish parameters and realistic goals? Parameters are your guard rails. We utilize a strategy to best position ourselves for the least amount of loss and the most amount of profit. For the loose players with no intention of grinding out wagers, your parameters should start with maximizing results as long as you have the ability to re-up your bankroll or are a short-term player looking to score. I highly recommend looking backward from a standpoint of return. Say you have $500 in your bankroll. You may not have a specific dollar growth expectancy but you should be trying to max out your wagers. You should not be deciding which one game to make a double or nothing wager, but that is sort of what I am talking about. You should be thinking about how much money you are going make not how much money to hold back to use tomorrow, you need a guardrail around the quality of games you are wagering. Every day offers a menu of games to wager on. Remember that tomorrow offers opportunities if there is not the "step out" wager game today. For tonight's menu, maybe play smaller strung together wagers where your risk is small yet return is high. As an example, tonight play a 3 team parlay and a 2 team parlay hoping to hit both but if you win one, they will more than cover each other generating a small profit. You are strategically maximizing lesser quality to get the highest return. Keep in mind, you are not holding back and not worried about losing your bankroll. Then tomorrow, play a strategically large wager on the best game on the board to maximize that opportunity.
It is a much more disciplined approach for the grinder type wagerer. Your wagers are always made with the intention to grow your bankroll incrementally and to minimize loss. In this scenario, we are not trying to maximize wins but to minimize loss and risk of bankroll depletion. We do this by setting limits on how much we can lose in a day and by being very selective in the wagers we make. This style will allow us to establish realistic goals which will create our guard rails. We need to understand what are realistic goals? As shown above, you can risk any amount at any time, and in the short-term outlook and make some money or often times, lose all of your money. However, if you are trying to make this a steady part-time income or full-time career, you'll need to know what that looks like. This style requires a large bankroll. We are investing a part of our bankroll each day. We find the best positive EV opportunities then make consistent "unit" wagers based on strength of value. We are making only wagers that are EV positive.We will also expect to win these wagers at a 55% rate or higher. The win rate required is 52.38%. It's the break-even rate due to 10% vigorish at the bookmaker. Maintaining this bankroll requires having 6% or less of your bankroll on wagers in action pending results at any given time. This parameter allows for losses and losing streaks without compromising the 1 unit or 2 unit scale or depletion of the bankroll. It is important to maintain the scale to overcome bad days without changing your unit sizes. The 2 unit is the max bet. It can slightly vary in value because 6% is the max as it would be most allowable in play amount, however, you may have another wager to make at the same time. In that case, you might make the 2 unit wager 4% and the 1 unit wager 2% of the bankroll thus keeping the 6% in play the guardrail. We are not risking large portions of bankroll so we won't win large portions of money. This method requires the ability to beat the number more than the breakeven rate AND the discipline to limit the number of wagers resulting in exposing our bankroll to more than 6% in action opportunities. We need only to wager on the most premium of spots in this style. This is investment style wagering where we make money over time and get a solid return on our investment.
Here are some pitfalls to avoid.
Do not make a larger percentage wager than you should. Stay disciplined to your path and style.
Do not increase unit scales or sizes until your bankroll grows proportionately.
Chasing your losses is bad behavior and a sure means to bankroll mismanagement.
