Originally taped in March of 2011 for March Madness, Pregame.com's RJ Bell talks with "The Philly Godfather". Learn how big betting syndicates work, and how they are operated like Fortune 500 companies. A must listen for anyone who is serious about betting on sports!
Must haves for Serious Players
I got questioned the other day about bet size and “should I be using Kelly Criterion”
to determine proper bet size?
Kelly Criterion is a formula for determining optimal bet size if you have an accurate understanding of what you “edge” is.
Here is the equation:
F = b x p – q / b
F = fraction of bankroll bet
b = odds paid on the wager (-110 = .91)
p = odds of winning (55% odds would be .55)
q = odds of losing (45% would be .45)
So assuming that you are a 55% handicapper against -110 pointspreads, by plugging the numbers into the equation you will see that you should be betting 5.5% of your bankroll on each play to fully maximize your edge.
This looks good on paper, but the problem that I have found over the years is that:
I use a guide for determining your edge by documenting your last 1000 plays and calculating your win percentage. Over a 1000 game sample you should have a good understanding if your betting model is successful, and to what degree.
As far bankroll size goes lets start with someone who is interested in betting $100 a game. I like to start with a 2% rule regardless of edge. So a $100 bettor should have a bankroll of at least $5,000.
I’m unsure of my edge, how much should I bet?
To truly understand your long term edge, you have to be the sharpest of the sharp. A simple way to manage your bankroll effectively while continuing to develop your betting models is to flat bet with daily resizing.
So with your $5000 bankroll you would start the season betting $100 a game (2%). After each night’s games, based on if you won or lost for the day, simply recalculate 2% of your total bankroll to determine your bet size for the following day.
This strategy will keep you out of trouble in a losing streak and maximize profits when you are winning.
So in summary:
Stay disciplined in your approach and keep learning….Fazzer.