Bankroll management or money management appears to be one of the most misunderstood concept in sports betting. Some information is based on opinion, some on concepts from outside of betting that are relevant…and some that are accidentally right. First lets define what it is, and is not:
Bankroll management is the practice of calculating and limiting the size of your individual bets to reduce the risk of a single bet, series of bets or losing streak from wiping out your entire bankroll.
Let’s dispel some money management myths:
- Bankroll management can make you more profitable – This concept seems to come from the theories around financial markets. Regardless of what sports betting sites might tell you, there are very few similarities between the two. Money management in investing (stocks and bonds) involves minimizing risk but is aided by the concept that you typically buy and hold investments. In sports betting your investment either completes in a 100% win or 100% loss on almost a daily basis. Spreading risk out over time does not offer any benefit. You can bet 100 games in a season, or 100 games in a single day with the same chance of being successful. This concept can be better expressed as “Money Management Can Make You Lose Less”
- Bankroll management has no basis in fact – Unfortunately, I have found a few very smart mathematician-gamblers that will give you this advice. This simply isn’t true. Money management is a way to fight against the volatility (or “losing streaks”) inherent in sports betting. Over the long term a 53% sports bettor will make money BUT over the short term there could be times when they are deeply in the hole. Proper money management helps you weather these times. If you don’t have enough bankroll, you could find yourself out of the game before you get a chance to see your winnings level off.
- There is one correct method of bankroll management for all bettors – how you manage your money in sports betting changes based on the type of bettor you are, how much money you are comfortable losing over time and what your expected outcome is.
Here are three bettor types to consider as we consider money management:
- The “Bet the TV Games” bettor likes to have a bet or two down to keep things interesting. There is no expectation of long term winning and you are willing to take a swing for the fences. This type of bettor generally is unsuccessful over the long term but sees most of the value in the fun of having a bet down.
- The “Conservative Strategist” bettor wants to make sure that their bankroll takes them through the entire NFL season and ideally returns a small profit. They like to be able to say the they have gotten the better of the sportsbook, but know that they are never going to make a living sports betting
- The “Pro Sports Bettor” is something some bettors aspire too, but few realize requires huge discipline and daily dedication. This person keeps very close watch on their bankroll because it is their livelihood and doesn’t take any extra risk over those inherent in gambling.
If you are the first type of bettor, I expect money management is not really worth your time. You will likely have to make regular deposits to the sportsbook occasionally one of your big parlays could work and you could end up with a windfall. This is a fun way to bet but eventually you will begin to expect more from your betting.
The strategist hates to lose. Though not looking to make a profession of betting, the strategist knows their winning percentage and how much above the breakeven point is. The strategist is like the marathon runner of the betting world. Money management assures that the strategist is able to make bets all season without increasing their expected bankroll and therefore spreads risk out over time.
The professional fights for every odd, half-point and edge. There are no favorite teams; not even favorite leagues. Just winners and losers. The goal is predefined and clear and each bet is a step toward that. Bankroll is life and death, and discipline in mixing risk and reward is clearly calculated. The professional sports bettor need to make regular profit and must never significantly eat into bankroll. For this reason money management is key.