Sports Betting Money Management System
by Robert Ferringo - 01/15/2008
Would you believe me if I told you that the key to being a successful sports bettor is only partially about how much you know about sports and wagering? A critical component of sports betting involves intelligent money management and finding an approach that best fits your goals as a sports gambler. How you manage your bankroll will not only dictate how you play, but also how long and how much profit you earn while doing so. The following will explain my thoughts on the best sports betting money management system.
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There are essentially two schools of thought about sports betting money management and there is a heated debate within the gambling community as to which works best. The first method is the more theoretically and mathematically sound of the two and it involves what is called "flat betting". The second method is a bit more practical and realistic and has been very successful for us here at Doc's Sports services.
Flat betting is a style of sports wagering where every single bet is made for exactly the same amount. The industry standard is generally held to be 2 percent of your total bankroll. This means that a gambler that starts with $1,000 would bet $20 per game, on every game, no matter what the circumstances. Most skilled money managers would also start to recalculate their bet size after they have increased their initial roll by 25 percent, meaning that after they increased their account to $1,250 they would start to bet $25 per game because it would constitute 2 percent of your overall stack.
This type of wagering also completely excludes such low percentage bets as parlays, teasers, and money line plays.
The idea of flat betting, or maintaining "wager integrity", is almost a clinical approach to sports betting and money management. It is cool, efficient, and the most mathematically viable. Factoring in a 10-percent vigorish, which means you bet $110 to win $100, a bettor's breakeven point while flat betting is just 52.68 percent. Considering that many professional handicappers can easily achieve a 56- to 58-percent success rate the return on your investment can be ample. Also, consistently betting the same amount will help you to more easily weather the bitter losing stretches that all gamblers endure.
However, this idea is often preached and rarely practiced. Most recreational gamblers do not have the patience or the discipline to embrace this approach. And that is 100 percent acceptable. Not everyone who wagers on sports is doing so as an investment. Sure, everyone enjoys winning. But for some players the entire endeavor is merely a form of entertainment and they will gladly pay a few hundred bucks for a season's worth of football or college basketball betting.
Which brings us to the second mode of thought in regards to money management in sports wagering: scaled betting. In this approach each bet size varies depending on the probability of the play's success, the size of your bankroll, or the value of the odds. This method includes such wagering tactics as the Kelly Criterion, chase betting, or Unit betting.
In practice, the idea of scaled, or tiered, betting can best be summed up by Doc's Sports Unit System. We use a system where plays are graded based on a 1- to 8-Unit basis depending on the strength of the situation as determined by the individual handicapper. A "Unit" is a generic term and its value depends on the size of your bankroll. Our average play grades out around 3 to 4 Units and that should still represent approximately 2 percent of your stack.
Just as there are benefits to flat betting, there are also some very positive aspects to scaled wagering. The main benefit is that it gives you the flexibility to really take advantage of prime gambling situations and exploit weak or slow-moving lines. An example can be found in Doc's Sports' 2006-07 college basketball season, where Doc went a stellar 7-1 on his Conference Game of the Year picks. Because those selections were rated at an average of 6 Units the return on those top selections was +36 Units as opposed to the approx. +18 Units that would have been net if he had played all of his games as 3-Unit selections.
Another benefit of having scaled wagers is that it allows the freedom to bet a higher amount during hot streaks and a little less during cold ones. (There is some debate over this theory as well, but we'll save that one for another time). A savvy gambler will realize when the right time to adjust their bet size is and this can help them take full advantage of their positive runs and help minimize the damage during cold runs. The risk is higher using this approach but the return on investment can also multiply much more quickly. In a lot of ways it's similar to the low-yield vs. high-yield dilemma that faces people playing the stock market.
Bettors aren't machines. While flat betting is unquestionably a more mathematically sound approach to money management for sports gamblers that doesn't mean that it's the "right" way to do it. I mean, statistics and percentages don't always predict what happens on the field. There is a human factor and there are intangibles beyond quantification. The same goes for sports betting. There is a "feel" involved. Scaled betting accounts for this.
In conclusion, how adopting the proper money management strategy for sports betting is really a matter of personal choice and comfort. A main determinant is exactly what you hope to accomplish as a sports bettor. If you are trying to make a living gambling on sports or approaching it as a long-term investment then a solid, disciplined, flat betting approach is probably the way to go. However, if you are starting with a small bankroll (less than $500), are just gambling as a form of entertainment with no qualms about losing the money, or you're just looking for an aggressive high-risk, high-reward approach to betting than a scaled approach is the most likely to make you more money in a shorter period of time.