What is Bankroll Management in Sports Betting?

It might not have the glitz and glamor of some other money-making topics, but bankroll management might be the most important skill a sports bettor can have to make consistent long-term profits. In sports betting, bankroll management is all about using and keeping track of your funds in a responsible manner.

We’re here to explain everything you need to know to manage your bankroll to perfection, including key sports betting money management terms, different models you can follow to keep track of your funds, and some important tips for continued growth.

Bankroll Management Terms Explained

Before we dive deep into the intricacies of how to be a good sports bettor through bankroll management, let’s go over some of the key terms and concepts that you’ll need to understand.

What is a Sports Betting Unit?

A unit in sports betting is simply a way to standardize bankroll management without having to dive into the actual dollar amounts. Basically, a unit is just the amount of money you’d wager on a normal bet. We recommend this amount be between 1 and 5% of your total bankroll.

Let’s look at an example. Say it’s the opening day of the NFL season and you’ve set a bankroll of $1,000 to last yourself through the Super Bowl. If you want to put down 5% of your bankroll on each bet, then one betting unit for you would be $50.

What is ROI?

Return on investment (ROI) is a term that you’ll find in practically every business setting on Earth. Essentially, it’s measuring your profits as a percentage of total money spent.

Let’s continue with that same NFL example from the sports betting unit section. Say you stick to that $1,000 bankroll throughout the entire season and end up with 3 units of profit off betting 30 units. To calculate the ROI, you’d multiply the number of units (3) by the unit price ($50) and then divide it by your total units spent (30) times the unit price.

(3 x 50) / (30 x 50) = 10%

This would leave you with a very healthy 10% return on your investment.

What are the Four Bankroll Management Models?

Now that you understand some of the key terms, it’s time to select a gambling money management model that works for you.

Using a bankroll management strategy doesn’t mean you always have to bet exactly one unit. There are a variety of betting models to choose from with varying levels of risk depending on your comfort level.

Read through each of the models below carefully and choose the one that you’re most comfortable with.

Flat Betting Model

Safe and reliable, the flat betting model takes the tough decisions entirely out of your hands and replaces them with one simple rule. One unit equals one bet.

You’ll also need to choose whether to go with the ‘to win’ or ‘risk’ method on each bet. The to win method means you’re betting with the goal of getting 1 unit of profit. For example, on a standard -110 moneyline bet, you’ll need to wager 1.1 units to get 1 unit in profit. The risk method involves betting a single unit each time, with the return decided strictly by the odds.

We recommend using the to win method on spread bets and the risk method on moneyline underdogs.

Percentage Model

Unlike the flat betting model, where your unit size is set at a fixed amount, the percentage model means that the value of your betting units will constantly fluctuate based on the current size of your bankroll.

Let’s go back to our $1,000 NFL bankroll example. If we decide to set our initial unit at 5% of our bankroll ($50) and then win our first bet at -110 odds, our total bankroll would increase to $1,045.45. Take 5% of our new bankroll value, and you get a unit size of $52.27.

By having the size of a unit change proportionally with your bankroll, you increase your ROI when on a hot streak. But conversely, it also makes it challenging to get out of a hole because the size of your wagers decreases after each loss.

Confidence Model

With the confidence model, the rate of growth for your sports betting bankroll is firmly in your hands. Unlike the flat and percentage models, the confidence model allows you to bet more or less than one unit based on the bet itself. If you’re confident that a bet is an absolute sure thing, you can wager two or three units on it rather than the usual one, you can also wager half units on riskier parlays.

Before you fully commit to the confidence model, we recommend that you analyze your own betting habits first to see if it is worth it. While using the flat or percentage model, start ranking how confident you are in each of your picks. If your more confident picks consistently turn a higher profit, then consider switching to this model.

Kelly Criterion Model

Instead of making your wagers based on a vague confidence level, this model asks you to come up with an exact percentage for how likely you think a bet is to hit and then plug it into this formula to determine the wager size.

(Odds of your wager x estimated win probability – estimated loss probability) / Odds of your wager

Let’s put this into an example. Say you back the New York Giant’s Week 1 moneyline at +150, but you believe they have a more optimistic 45% chance of winning the game. Calculating your wager would look like this.

(1.50 x .45 – .55) / 1.50 = 8.3%

This means that the Kelly Criterion model estimates you should wager 8.3% of your bankroll based on the given odds and confidence level.

Incredibly important when using the Kelly Criterion is being honest about your chance of winning. It’s up to you to make informed decisions about how likely a bet is to land or not. Because, if you’re overly optimistic, the formula could advise you to put down a massive percentage of your bankroll.

Why Do You Need to Manage Your Bankroll?

Bankroll management is the cornerstone of a successful sports bettor. It’s not about hitting massive wins; instead, it’s about ensuring stable, consistent growth. By maintaining a decent bankroll and adhering to smart money management strategies, you protect yourself from major losses and position yourself as a financially savvy bettor.

This approach is the best way to make money in sports betting in the long run, as it safeguards your funds and enhances your chances of achieving sustained profitability, even in the most unpredictable of times.

What is the Right Amount to Wager?

The ideal amount to wager in sports betting isn’t one-size-fits-all; it largely depends on your starting bankroll and your bankroll management strategy. A commonly recommended guideline is to bet 1-5% of your bankroll per unit.

However, it’s essential to tailor this percentage to your risk tolerance. Even when using a confidence model, we advise against spending more than 2 to 3 units on a single bet.

This approach strikes a balance between pursuing profits and ensuring bankroll stability, which is crucial for the long-term sustainability of your sports betting endeavors.

Bankroll Management Tips

Now that you have the basics down and have chosen a management model, you’re almost ready to start increasing your profits with confidence. But first, we have a few more tips that anyone interested in potentially making money while sports betting should understand.

From constantly scanning for the best bonuses in lines, to showing patience when things get rough, here are five tips to help with your sports betting money management, especially with a small bankroll.

Take Advantage of Bonuses and Promotions

Bonuses and promotions can be your secret weapons for building a healthy bankroll. Practically every sportsbook offers enticing offers like free bets, welcome bonuses, or cashback promotions. These can give you an edge by providing extra funds to wager with or acting as a safety net against potential losses.

For instance, let’s say you sign up with DraftKings and receive a $500 welcome bonus. With this bonus, you can place bets without risking your own funds, allowing you to explore different strategies and potentially turn the bonus into real profits. Such promotions are excellent for both beginners looking to get into sports betting and experienced bettors aiming to grow their bankroll.

Go Odds Shopping

In sports betting, not all odds are created equal. To maximize your profits, it’s essential to shop around and find the best odds for your wagers. Different sportsbooks may offer slightly different odds for the same event, so it’s wise to compare and choose the most favorable ones.

For instance, suppose you want to place a parlay on an NBA game. You check DraftKings (+250), BetMGM (+275), and FanDuel (+245) and discover that BetMGM offers the best odds for your chosen bet. By doing odds shopping, you can potentially increase your winnings without taking on extra risk.

Always Set Limits

One of the cardinal rules of successful sports betting, especially with a small bankroll, is setting limits. Establish daily, weekly, or monthly betting limits that align with your financial situation and risk tolerance. Sticking to these limits helps protect your bankroll and prevents you from making impulsive bets beyond your means.

For example, if you decide to set a weekly betting limit of $100, it ensures you won’t wager more than you can afford to lose. This disciplined approach safeguards your bankroll and keeps your sports betting endeavors enjoyable and sustainable. Betting beyond your means can lead to financial troubles and make sports betting a stressful experience.

Don’t Get Emotional

Emotions and sports betting often make for a volatile mix. It’s easy to let your heart rule your head, especially when your favorite team is playing. However, allowing emotions to guide your betting decisions can lead to impulsive, irrational wagers that drain your bankroll.

To be a successful sports bettor, it’s crucial to maintain a level head. Base your bets on research, data, and analysis rather than personal biases or sentimental attachments to teams. Remember, the goal of sports betting is to have fun making informed, profitable decisions, not to blindly support your favorite team.

Get the Edge with a Live Betting Hedge

Live betting, also known as in-play betting, offers a unique opportunity to hedge your bets and mitigate potential losses. Let’s say you’ve placed a pre-game wager, and it’s clear that your selection is unlikely to win. Instead of letting it ride and accepting a full loss, you can use live betting to your advantage.

For instance, if you initially bet on Barcelona FC to win a soccer match, but Real Madrid has taken a commanding lead, you can place a live bet on Real to secure a profit or break even. Live betting allows you to adapt to changing game conditions and optimize your bankroll management strategy in real-time.

We hope you come out of this as a more informed bettor who’s ready to make potentially consistent profits without risking it all.