Money management

Amateur bettors or ‘squares’ as they’re also known, find it extremely difficult to make money on sports betting. There’s no exception to the rule: no square will ever make a living betting on sports. Why is it that the vast majority of those who at one point in their lives figure sports betting might be something they’d do for a living, give up so easily after a while? Most people blame their handicapping, the picks they acquire or the fact that they cannot gain access to ‘inside’ information (whatever that is). The true reasons have little to do with any of those factors in 99% of the cases. What their lack of success comes down to is bankroll management.

Some people are born with poor bankroll management skills, and therefore they simply cannot muster the discipline needed to manage sports betting money properly. Other people don’t even know they should manage their sports betting bankroll at all. Most people are both undisciplined and poorly informed unfortunately.

Bankroll management in sports betting is a fairly simple concept at the core. Here are the rules: never bet more than 5% of your bankroll on any one game, regardless of who swears up and down that it’s a lock one way or the other. Even if your own handicapping tells you it’s a lock, you still shouldn’t bet more on it. As a matter of fact, the standard amount that you should routinely bet is 2-3%. How come it’s so little and how can one make money betting that much? The logic is pretty simple. With your handicapping skills and the picks that you buy (or get for free) you create positive EV on the bets that you make. (kind of like when you sign up for rakeback in poker) At least that’s how it should work on the majority of games you bet on. Positive EV means that you’ll have a tiny edge on the bookie (again, how you achieve that edge belongs in a different article), an edge that will have to be put to work over and over. Sport betting features a high variance. That means sometimes you’ll go on winning streaks, sometimes you’ll go on losing ones, even if you do everything right. The bankroll has to be big compared to the size of any individual bet, so that it can absorb the variation and keep you in the game until the EV kicks in and starts delivering.

The EV+ works a lot like a casino’s house edge. If you ever studied casino gambling you probably know that the casino counts on the house drop or house hold to deliver revenue rather than the house edge. The house edge is there to induce the house drop. On a game which features a 5,5% house edge, the house drop can be as big as 21-30%. If you exploit EV+ over and over repeatedly, a house-drop like phenomenon will occur, with the bookie dropping you the money.

Being undisciplined never gives this whole system a chance. If you work in the sports betting industry (you’re a handicapper or you sell picks), you’ll often be confronted with situations when even though you hit a 7-3 weekend there will be complaints and people who actually lose money while going 7-3. How is that possible? They win a couple of bets, then greed takes over and they’ll start upping the stakes. They lose, they begin chasing, and what they end up with is a loss on a perfectly good set of picks that work just fine for a disciplined shark.

Without proper bankroll management, you can be the best handicapper in the world (or buy his services), you’ll still walk away a loser. This is what most squares fail to grasp. Getting your handicapping right is to create a positive mathematical expectation. Playing in a disciplined manner, with proper bankroll management is the way to put your expectation to work.

Regardless of how small a bankroll you start on, always bet only 2-3% of it on EVERY particular game. You may go up to 5% on games you have a strong feel about, but never-ever exceed that. Remember, your first goal is to survive. Winning comes second. If your bankroll doesn’t survive you experience the ultimate failure as a sports-bettor: you bust out.

This is usually when people turn desperate, and they begin starting new bankrolls on money they need for other – more important – things (like the rent).

Always keep a separate bankroll for sports betting. Manage it well, protect it and use it to your advantage. Allow it to work for you.