If you are looking to place just one or two sports bets while you’re on a friends weekend in Vegas, you don’t have to worry much about managing your bankroll. Instead, you need to determine how much money you’re willing to risk for the fun of it all and stick to that amount.
However, if you love sports betting, or you’re starting to love sports betting, and you want to regularly place bets, you need to think seriously about managing your bankroll.
First, let’s talk about how your bankroll serves you. In sports betting, your bankroll is similar to a sum of money in an investment account. You start with your seed money. That money grows or shrinks based on the outcomes of your bets. Winnings enter the account, losses exit the account. You keep an eye on your balance at all times. And you can add to your bankroll from other funds, if you wish.
Ideally, you win enough sports bets to fund your additional bets and grow your investment. At a minimum you must break even to fund continued betting.
If order to win long term at sports betting, you have to win 56 percent of your wagers. If you win 55 percent, the vig is going to chew up your bankroll over time. If you win 56 percent of your sports bets over time you can generate wealth in the long run, similar to an investment.
Most sports bettors struggle with managing their bankroll. What inevitably happens is that bettors will go through streaks, both winning and losing streaks. They’ll have periods of times where they are losing everything they bet on and they are getting nowhere near that 56 percent winning average. Following winning streaks, or in the midst of losing streaks, sports bettors often make riskier bets that significantly damage their bankroll.
In general, long term sports bettors need to have a strategy for managing their bankroll. Having an overarching philosophy will help shield bettors from unnecessary risk during high highs or low lows.
Many experienced bettors advise other bettors to always place flat bets. For example, if you have a $5,000 bankroll, you should never be betting more than 3-5 percent of your total bankroll on one bet. If you’ve got $5,000, your maximum bet should be something near $200. So every wager, no matter what, is $200. You make that bet all season long, no matter the matchup or circumstances.
Flat betting takes an extraordinary amount of discipline. Especially if you’re looking at betting patterns, such as reverse line movement. Having the discipline to keep to your flat bet is very hard. And some bettors would say it’s unwise if you notice reverse line movement.
There are other experienced bettors who believe you should rate each of your picks. Something like 1 through 5; 1 being your least confident bets and 5 being your most confident bets.
Thus, if you have $5,000 in your bankroll, one unit would be $50 (or 1 percent of your bankroll). And depending on your confidence level, on each bet you place you bet anywhere from one unit ($50) to five units ($250). This ranking system allows you as a bettor to fluctuate your bets based on how you’re feeling, which does allow for you to use insider information or pattern recognition!
However, ranking bets can be really tough when you’re in a cold streak when nothing feels right. It can cause you to second-guess yourself. Plus, you may sometimes see situations where you win all your one unit bets and lose your five unit bets. In this instance, if you won three of your one unit bets and lost your single five unit bet, you still likely lost money overall that day.
Willy Nilly Bets
A majority of the public says, “I’m going to bet whatever I feel like!” And they’ll bet $500 and lose it. And then they’ll bet another $500 and lose it. Now, they’re down $1,000. And so they’ll decide to go all in with the remaining $4,000 because they think they aren’t likely to lose three in a row. And that mentality (even in less dramatic forms) is what eats sports bettors alive.
Long-term bettors often choose a combination of risk management techniques. For example, they may place a flat bet most of the time, but allow themselves one “stretch bet” per week or per month.
Anyone who has placed sports bets for an extended period of time, has had a difficult time remaining consistent in their wagers through the good times and bad times.
Finding a way to manage risk and exercising discipline in your bets is the only way a bettor can stay in the game for the long run.
Paying attention to the vig or the risk compensation and the way your losses will chip at your bankroll is not common. There are very few people who will manage their bankroll at that level of detail. This is partially how people become deeply indebted through gambling. Or, how they leave their gambling experiences behind with a negative taste in their mouth.
Understanding your risk, losses, and management strategies is how you can have fun (and potentially generate wealth) for a long time to come.