Guest post written by Paul Micelli
Bankroll management has an integral part to play in the world of the sports bettor and adopting a sensible attitude to controlling funds can often make the biggest difference in enjoying long-term success or blowing your stack on a single event.
Although many bettors apply stakes on a random basis, the cautious will retain a tighter control over their bankroll so that when a selection loses they can still live to fight another day.
In truth, the overwhelming majority of gamblers wager too much. Would a stock market analyst seriously consider investing 25% of their retirement account into a commodity that stands a 50% chance of returning nothing tomorrow? Of course they wouldn’t! This makes it all the more surprising that many sports bettors are prepared to wager more than 20% of their bankroll on a race or event that simply presents too much of a risk.
A Theoretical Look at Bankrolls
I am going to make you an offer. I will present you with a series of bets at odds of 2.00 that offer a 10% advantage over my own. This means that for every bet placed, you will stand a 55% chance of winning while my own chances are set at just 45%. Over a sustained period of time, you will undoubtedly win money from me because the odds are significantly in your favour. If I allowed you to place 500 bets at a £100 stake each time, you would stand to make a profit of £5,000 and your chances of collecting would be excellent.
However, I am going to place just one restriction on our betting activities. I am only going to allow you a bankroll of £500. You will not be able to add to your bankroll at any stage. In effect, I am asking you to sacrifice 20% of your bankroll each time if you want to take £5,000 from me. Would you still be confident about winning my money?
The answer should be a resounding NO! Although there is a strong mathematical probability that you would win approximately 55% of all bets over 500 different wagers, the chances of you moving into profit over the first five events are significantly lower and it’s almost inevitable that I’ll be enjoying your bankroll within a very short space of time.
Betting for profit is a strategy for the longer term and most bettors usually end up with nothing because they invest too heavily at too early a stage. By accepting the restriction on my offer, you’d effectively be handing the house a very significant edge.