When making crucial sports betting decisions, it is not just important to find the right sports events to bet on but to also have an appropriate strategy to divide or manage your financial portfolio. Without the right knowledge and strategy on how much to wager on a particular event, you could easily plunge yourself into a pit of losses. This is where a strategy like the Kelly Criterion comes in handy.
Kelly Criterion Sports Betting Strategy
Before we go any further, let’s make it clear that the Kelly Criterion can be used by anyone, but it is not meant for everybody. The mathematics involved in the process can particularly make it a bore, if not painstaking to use if you are a recreational bettor. Many bettors have, however, tried this betting strategy successfully and it has helped many punters to improve the winnings, so you may as well try it if you are seeking similar success in sports betting.
Logic Behind the Kelly Criterion
Essentially, the Kelly Criterion is a progressive betting system that recommends for you to calculate the proportion of your own funds to bet on an outcome whose odds are noticeably higher than expected, with the aim of increasing your profits and bankroll in a short span. The basic tenet behind the Kelly Criterion is that, the higher your probability of winning in a bet, the more you’re supposed to risk while the less your probability of winning, the less you are supposed to risk on that bet.
Kelly Criterion Formula
The popularity of the Kelly Criterion has seen many analysts prescribe many variations of this betting strategy. The basic formula for the strategy, however, remains more-or-less the same, as follows:
The Kelly Criterion = (bp-q)/b, where:
- B = the Decimal odds -1
- P = the probability of success
- Q = the probability of failure
To understand this criterion further, let’s use a coin toss as an example… If you are considering to bet on a coin toss to land on heads at 2.00, yet the coin toss has a biased 52% chance of ending up on heads, then the criterion would guide you as follows:
- P= 0.52
- Q = 1-0.52 = 0.48
- B = 2-1 = 1.
When you calculate the numbers (0.52×1 – 0.48) / 1, the answer you get is 0.04. Now, in this case, the Kelly Criterion would recommend that you bet 4% – a positive percentage that implies that there is a betting edge in your favor.
Thanks to technology, you don’t have to worry about the manual calculations; all you have to do is to download a Kelly Criterion calculator or do the calculations over the internet on the many online platforms that offer the calculator freely for your use.
Final Remarks on Kelly Criterion
Based on the low-risk nature that comes with the Kelly Criterion, many bettors prefer it over betting methods such as Fibonacci and Arbitrage methods. As a note, thought, the Kelly Criterion is only valid “when the game is played many times over, with the same probability of winning or losing each time, and the same payout ratio,” so caution must be observed to avoid using it wrongly.