Understanding Bankroll Management
The two most important concepts to being a winning sports bettor are Handicapping and Bankroll Management. If you can pick winners, but can’t bet them effectively, you will lose your hard-earned money. In this article, I discuss a simple Bankroll Management strategy that will keep you out of trouble.
Your bankroll is the money you have to wager. It should be kept physically separate from your other funds at all times. Pay your bills first, make sure the kids are happy, clothed and fed, the money left over is your wagering bankroll. When I say physically separate, I mean it. Have another bank account for it. Or put it under the other side of the mattress. You always want to have cash on hand for when optimal betting opportunities come along.
Probably the most common mistake bettors make, new and old alike, is being reckless with their bankrolls. If they love a game, they’ll bet more on it. If not, they’ll bet less. And if they are bored, they will bet on nearly anything, just to have a little action. When they’re winning they will double down or even triple down on a wager because they’re overconfident. When they’re cold, they will start chasing lines and games they would not otherwise bet, with the hopes of winning it all back on one big play.
This approach is dangerous and unsustainable in the long run. And, without a doubt, it is the quickest way to ruin your bankroll.
We suggest using a flat-betting approach.
Flat betting means betting the same amount on every game. Designate a “unit” wager amount, based on the size of your bankroll. There are different approaches to this strategy, but most sophisticated bettors only risk 1% to 5% of their bankroll per play, regardless of their confidence level on a particular game or wager. Start slow and see how it goes, perhaps betting only 1% of your bankroll on any game or line.
For example, if you’re starting with a bankroll of $1000, you should risk $10 on every bet. As your handicapping improves and your intuition, situational analyses and instincts are more finely tuned, you can then increase your unit size. But remember, you will still only utilize a flat-betting approach.
As your bankroll increases, you can move up to $15 wagers, and so on (implies a bankroll of $1500 for a 1% bettor). However, if you are comfortable with additional risk, perhaps employ a 3% unit size. Just remember, the more of your bankroll you put at risk at any one time, the greater your risk of ruin.
Being consistent and disciplined with your unit size will help manage the inevitable streaks, both good and bad, that come with sports betting. When you encounter a losing streak, and you will, this management style will save you from going broke. And when you are winning, it will provide a positive Return on Investment (ROI).
Flat betting also means betting games individually and avoiding parlays! As we’ve discussed on these pages, parlays are the crack cocaine of sports betting: incredibly attractive because of the promised payouts, but at the same time, dangerous to your betting longevity.
Flat betting will not provide the type of huge one-time payout that gamblers crave. Rather, it is an intelligent, long-term strategy that helps bettors remain disciplined through the unavoidable hot-and-cold streaks in sports betting.
And remember, we do not gamble!