Money Management for Sports Bettors

Money Manage Sports

Money management describes how you manage the money you’ve set aside for sports betting. You’ll also often hear it referred to as “bankroll management.” Either way, it’s the same thing.

That is, in fact, where money management begin:

You set aside money you don’t need for any other purpose specifically to use for your sports betting activities.

This is an important step in the process regardless of your goals for your sports betting hobbies.

Professional sports bettors (or would-be pros) have a goal of generating a profit.

Recreational sports bettors have a goal of enjoying their betting activities.

Both those goals are okay.

But you’ll have more success with either or both those goals if you manage your bankroll appropriately.

This post offers several insights into how to do that:

1- Are You a Winner or a Loser?

If you’re a strictly recreational sports bettor—and most of us are—you’re probably a net loser over time.

In fact, probably only 5% to 10% of the sports bettors actively betting are consistently profitable, although a much larger percentage think they’re profitable when they’re not.

You should decide whether your goal is to be a recreational sports bettor or a “serious” bettor.

You can change this goal at any time.

I have a friend who would never bet against the Dallas Cowboys, no matter how good the odds offered. He’s a recreational sports bettor.

In fact, the only time he places any kind of sports bet is when he’s betting on the Cowboys.

That’s the opposite of the attitude you must have if you want to be a professional or serious sports bettor.

If you want to win consistently at sports betting, you must be willing to place any bet that offers a positive expectation.

You must also be willing to avoid any bet that offers a negative expectation.

Those aren’t the only skills required of a professional gambler, but that’s a start.

If you’re not sure which category you fall into, start keeping written records of your bets, your wins, your losses, and the size of your bankroll. If you find that you don’t have the discipline to track these things consistently, you’ve answered this question:

You’re a recreational bettor.

If you don’t have the motivation or discipline to keep records, you can’t be anything OTHER than a recreational bettor.

If you’re able and willing to start keeping records, you might have the beginnings of what it takes to bet on sports seriously.

2- Thinking of Sports Betting as an Investment

Serious sports bettors think of sports betting as an investment. And as an investment, you want to achieve a certain amount of diversification to protect you from the unexpected. It also mean you don’t put money on an event just on a whim.

Even the most successful sports bettors are wrong almost half the time.

The trick is to not have so much money invested in a single wager that you risk going broke.

And the percentage of your bankroll that you want to risk on a single sporting event is probably smaller than you think, too.

I’ll get into more of that later, but right now, let’s talk about an investor’s attitude toward his capital:

Real investors don’t invest money that they need for other purposes. They think long-term, and they invest money that they don’t need for things like rent, groceries, or child support.

Sure, some people play the markets with money they need for short term things.

Those aren’t investors, though—those are traders.

I didn’t suggest you think of sports betting as trading.

I suggested you think of it as investing.

Also, what kind of investor doesn’t track his investment performance?

If you’re treating your sports betting seriously, you’ll keep detailed records of how you’re performing with the hope of improving future performance.

This means you need to track your ROI—return on investment.

One of the reasons you do this is so you can compare your ROI investing in sports betting with your potential ROI for other investment activities.

If you can earn an annual 10% return on the stock market, while you’re only able to achieve a 5% annual return from sports betting, you should clearly switch where you’re putting your money.

You should also track your ROI for each sport. If you’re seeing 10% returns on basketball betting and 20% returns on football betting, you should change the amount of your capital that you’re investing in each sport.

You calculate return on investment by dividing the amount of your profit by the total amount you have invested. You then convert that to a percentage.

If you have a total bankroll of $10,000 set aside, and you win $2000 over the course of a year, your return on investment is 20%.

That’s far superior to most other investments, by the way.

Thinking of sports betting as an investment isn’t for everyone, though.

3- Thinking of Sports Betting as Entertainment

It’s okay if you’re only interested in betting on sports for fun. That’s a legitimate way to participate in sports betting, too.

How you manage your sports betting money changes, though.

For one thing, if you’re betting for fun only, you can probably count on losing over the long run. If you play long enough, you’ll lose all your money.

That’s called having a negative ROI, and that’s okay.

You don’t even have to track your return on investment, negative or not.

You just need to make sure you’re not losing money that you need to meet other responsibilities.

You also want to make sure you have enough money to gamble with all season.

Let’s say you like to bet $100 per game on 10 games per week, or put $1000 into action every week.

You don’t need $15,000 or $16,000 for the entire season, because you will win some bets.

You’ll probably be able to bet for the entire season on a bankroll of $5000 to $8000, depending on how often you win and/or lose.

Even that bankroll amount isn’t carved into stone. If you’re willing to go broke earlier in the season, you can gamble a smaller bankroll.

You could put your entire bankroll into action every week, in fact.

The main thing about managing your bankroll if you’re a recreational bettor is that you get much entertainment in exchange for your money as possible.

If you’re a millionaire, you probably won’t get much excitement from betting $11 on a football game. The amount of money is too small in comparison with your net worth, so why bother?

On the other hand, if you make $25,000 a year, $100 on a game might be too nerve-wracking to risk. After all, that’s almost a full day’s pay.

The best book I ever read about personal finance was Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Joe Dominguez and Vicki Robin. They suggest tracking your monthly expenditures to the penny every month.

At the end of each month, you categorize your expenditures. You can create any kinds of categories you like.

Then you compare the amount of money you spent in each category with the amount of satisfaction you felt like you got for your money. You track this with a + or a -.

If you felt like you could use more of that category in your life, you’re justified in spending more money on that category.

If you felt like you didn’t get much satisfaction from that expenditure, it might be appropriate to spend less on it.

I suggest you do the same thing with your sports betting.

Track how much you win or lose, then think about whether you got your money’s worth.

You might find that the size of your bets and the games you bet on change dramatically when you have more insight into what satisfies your entertainment needs.

4- Betting Units and the Overall Size of Your Bankroll

Your bankroll is the total amount of money you’ve set aside for sports betting purposes.

A betting unit is the amount of money you place on a single bet.

Both these numbers are for you to decide. You can find plenty of advice about how to divide your bankroll up into betting units, but at the end of the day, you decide.

I have some ideas for you to consider when it comes to that, but 1st, let’s look at some examples:

I’m an NFL fan, and I have no interest in betting on any other sports. Also, if I don’t have at least $100 riding on a game, I might as well have not bet on it at all.

For me, a single betting unit is $100.

I like to bet on 4 or 5 games a week, which means I’m putting $400 to $500 a week into action.

I’m a flat bettor, by the way. This mean I bet the same flat amount on every game. I don’t increase my bet sizes to try to make up for the previous week’s losses. I also don’t increase the size of my bets based on hunches or on how “sure” I am about the outcome of a game.

You’ll see people who do change their bet sizes based on how strong a pick they think a game is. Some of them even rate their bets on a scale of 1 to 5, and they bet $100 on a 1, $500 on a 5, and so on.

Most legitimate sports betting advice sites recommend a flat betting approach.

If you assume that I’m going to lose every bet I place this season, I need a bankroll of about $7000 or $8000.

On the other hand, if you assume I’m going to have a 50% win rate, I’ll need a bankroll of only half that to stay in action all season.

But I’ll probably end the season broke because of the losses.

If I’m a winning sports bettor, I need to size my bankroll and my bets in such a way as to avoid going broke.

That’s where this next section comes in.

5- The Kelly Criterion

Gamblers who have an edge can determine the optimal betting size using a formula called the Kelly Criterion.

This is a formula that looks at your advantage compared to the size of your bets. It’s meant to provide you with the most profitable bet size along with the lowest “risk of ruin.”

Risk of ruin is the probability that you’ll go broke because of a streak of bad luck.

Every blackjack player in the world has a story about how they were counting cards but went broke because of a string of bad luck.

Sports betting is no different. Outcomes vary based on pure chance all the time.

In blackjack, you estimate the percentage edge you have over the house, and that’s the percentage of your bankroll that you’re willing to bet. If you have an edge of 1% over the house, and you have a blackjack bankroll of $5000, you’re betting $50 per hand.

The formula used in sports betting is a little more complicated, but not much:

You multiply your probability of winning by the decimal odds minus 1.

From that, you subtract the probability of losing.

You divide that outcome by the odds minus 1.

Here’s a simple example:

You think the Cowboys have a 55% chance of winning, and the decimal odds on the game are 2.00.

  • 55% X 1 = 55%
  • 55% – 45% = 10%
  • 10%/1 = 10%

That final number is the percentage of your bankroll you should risk on that bet.

The better you are at estimating your probability of winning a bet, the more accurate the Kelly Criterion becomes at both maximizing your profits and at reducing your risk of ruin.

If you’re not confident about your probability of winning, go with less risk. Instead of betting 10% of your bankroll on that game, only bet 5% of it.

You sacrifice some potential profit, but you’re less likely to go broke.

And if you’re a would-be professional sports bettor, you’re out of business if you go broke.

6- Minimum and Maximum Boldness

One of the concepts I use to explain how to maximize your probability of doubling your money is the concept of boldness.

In this context, boldness refers to the size of your bet in relation to your bankroll.

If you bet your entire bankroll on a single event, that’s an example of maximum boldness.

If you bet 1% of your entire bankroll on a single event, that’s an example of minimum boldness.

If your goal is to double your money, the better approach depends on your level of skill. If you have an edge, a minimum boldness approach is better. You’re less likely to go broke when you’re putting a smaller percentage of your stake into action.

On the other hand, if you’re a net loser, your best probability of doubling your money is just betting it all on one game.

Let’s look at an example:

Suppose you pick games against the spread with only 45% accuracy. If you bet all your money on a single game, the probability of doubling your money is 45%.

But what’s the probability of doubling your money if you bet half your bankroll on one game and half of it on another game?

If you want to calculate the probability of multiple events happening at the same time, you multiply those probabilities.

In this case, you have to win both bets to double your money.

You have a 45% chance of winning the first bet. Multiply that by the 45% chance of winning the 2nd bet, and your probability of winning both bets is 20.25%.

Your other outcomes in that situation look like this:

  1. You could win bet #1 and lose bet #2.
  2. You could win bet #2 and lose bet #1.
  3. You could lose both bets.

If you’re a recreational bettor who just wants to “go big or go home,” maximum boldness is the sports betting strategy to try.

Yes, your probability of going broke is 55%.

But you have the entire off season to build a new bankroll, too.

And a 45% probability of doubling your money isn’t bad at all.

7- Greed, Tilt, and Discipline

If you’re a serious sports bettor hoping to earn a positive ROI, you’ll avoid a maximum boldness approach. If you really have an edge, your probability of doubling your money goes up as you place more bets instead of down. Determining whether you really have an edge is a matter of self discipline.

This means keeping records.

I’m sorry to beat that dead horse, but if you’re not keeping written records of your sports betting results, you’re NOT a serious sports bettor.

Without written records, you only have your memory to inform you whether you’re winning or losing in the long run.

And memory is notoriously unreliable.

You’ll also need to learn to avoid tilt and greed. Those 2 qualities have destroyed more sports bettors than almost anything.

Here’s an example of greed and a lack of self-discipline in action:

My friend Brian was absolutely convinced that he’d found the best bet of the year. The point spread was just ridiculous.

Normally, Brian bets $100 per game and has a $3000 budget for the season.

But on this game, he decided to risk $1000.

He lost.

He also had a run of bad luck on the other games he bet that week. He lost another $500.

His bankroll for the rest of the season was down to $1500.

At that point, he had a couple of options. He could reduce his standard bet size until he gradually caught back up to where he was before. This would take time and patience, but it would work. He does pick games at about 54% against the spread.

His other option was to place a big bet on next week’s “lock” in an attempt to catch up.

He bet his entire $1500 on a single game, hoping to recoup his losses from the previous week. He swore up and down that if he won this bet, he’d never risk so much of his bankroll on a single wager again.

He lost, and that was it for the season.

He was on tilt, too.

Tilt is an expression used more often in the world of poker than the world of sports betting.

It just refers to a mental and emotional state where you become irrational and start making bad betting decisions because of your previous “unfair” loss.

The best poker players and the best sports bettors never go on tilt.

If they start to go on tilt, they take a break until they can calm down and start making rational decisions again.

Warren Buffett is famous for saying that investing is at its best when it’s at its most business-like.

I have a similar idea about gambling.

Placing sports bets is better the more rational your bets are.


Bankroll management is the meta skill that separates the best sports bettors from the worst and most average sports bettors.

You can be one of the best handicappers in the world, but if you don’t manage your bankroll appropriately, you will go broke. It’s just a matter of time.

On the other hand, even recreational gamblers should manage their bankrolls in such a way that they achieve their goals. For many of them, this means just keeping their bet sizes low enough in comparison to their overall bankroll that they avoid going broke before the end of the season.

That’s why bankroll management begins with an analysis of your goals.