Let’s discuss money management for sports bettors. How to budget for each wager you make and the importance of managing your betting funds, otherwise known as your bankroll.
The topic of bankroll management may seem dull to some, but it’s essential to being successful as a sports bettor. Even if you are an exceptionally good sports handicapper, if you don’t manage your money properly you will lose it all. One poorly handled losing streak can ruin your entire bankroll.
Before we dive into the best bankroll management tips you should always remember the following:
If you only learn one thing from me in regards to sports betting and gambling in general, I hope it is the fact that you should never bet more than you can afford to lose. This is true whether you are a recreational or professional sports bettor. We all need money to pay the bills each month and you shouldn’t use money for living expenses to fund your bankroll. Do not use credit card debt to fund your betting bank. Your sportsbook account should be funded by money you already have and can afford to live without.
Now that I’ve made this very clear let’s get going.
Betting 1-5% of your bankroll for each bet is common advice for sports bettors. You can determine how conservative or aggressive you want to be depending on your own circumstances and tolerance for risk. But please do not bet more than this. The more conservative you are, the better chance you have of surviving a cold streak which is something that even successful bettors have to endure. The percentage you choose will determine your unit size.
The term ‘unit’ in sports betting is normally used to describe the size of someone’s bet. Because everyone has different sized bankrolls in dollar terms, bettors use the term unit instead of the actual size of a bet to show your profit or loss in standard terms that everyone can understand.
Using unit sizes is also a way to determine your bet amount based on your confidence level. Some use a 1-5 scale and other bettors may just choose to use a flat betting system where you bet one unit on everything. You can do whatever you’re most comfortable with, but in time I highly suggest you work towards at least a 1-3 unit system.
The most common is 1-5 units. The 1-3 unit plays are average plays, while the 4-5 and are the big plays where the handicapper feels they have found a lot of value. Some tipsters don’t follow this though and you may see 10, 20, or even 30 unit “bomb” plays. This definitely does not mean you should risk 10-30% of your bankroll on one play. If you are tailing someone that has these big plays and does actually win more than they lose, be sure to scale down your bets accordingly. You never want to be risking more than 5% of your bankroll.
I use a 1-5 unit scale for my picks and for this example we’ll use one unit as 1% of our $1,000 hypothetical bankroll. Therefore, one betting unit is $10.
This means we will be betting between $10 and $50 per bet depending on our perceived value and confidence in a pick. For casual bettors this may seem like a small amount to bet, but the math is clear and unavoidable. Bet any more than this and you can sink quickly. Even with this bankroll management strategy in place the 5-unit bets should be very rare. They should be used only when you have a significant edge.
Check out the Sports Predictor results page to see how each of the team manage their betting bank.
Let’s compare three hypothetical bettors all with a $1,000 bankroll. One is a completely reckless degenerate guilty of some sports betting sins, one is aggressively betting 5% on everything, and one is using our 1-5 unit system. Let’s say they all lose their next five bets (which will happen to you at some point).
The table below shows how much each bettor risked for their next five bets. After each starting at $1,000, their remaining bankroll is shown in the far right column. For our responsible 1-5 unit bettor, their unit size is in parentheses for each bet.
|Bet #1||Bet #2||Bet#3||Bet #4||Bet#5||Bankroll|
|1-5 Units Bet||-20.00 (2u)||-9.80 (1u)||-29.10 (3u)||-37.64 (4u)||-18.07 (1u)||885.39|
Here it is in a graph to show what happens to a bankroll with and without proper bankroll management:
You can clearly see that a losing streak of 5 bets does far less harm when you apply sound bankroll management principles. The ‘degenerate’ in this example could even be considered somewhat conservative as they showed some self-control by reducing their bet size. Many bettors in this scenario would chase their losses and increase each ensuing bet. The degenerate bettor still burned through 40% of their bankroll in just five bets.
The green line above shows how a 1 to 5 unit bankroll management plan only lost $150 (15%). That is far less painful than the two other approaches.
The blue line clearly shows how aggressive 5% bets really are and how fast you can lose your entire betting bankrolls. Every bettor in the world has lost at least 5 bets in a row and in this scenario they lose over 25% of their bankroll. It could happen even faster if they don’t frequently adjust the dollar value of their unit size.
A sound bankroll management plan along with strong self-control are vital to become a profitable sports bettor.