Sports Betting
Money Management

There are tons of different philosophies that are out there, but it really comes down to developing a fundamentally sound strategy and sticking to it no matter what. You're going to have losing streaks, you're going to handicap games that you feel 100% on, and you're going to have a few cocktails in you and want to chase (trust me on this one, I've learned the hard way).

But believe me, there will be times when you want to veer off from your money management strategy. BUT DON'T, I REPEAT DO NOT EVER STRAY AWAY FROM YOUR SPORTS BETTING MONEY MANAGEMENT SYSTEM OR YOU WILL GET BURNED. I WILL GUARANTEE IT BECAUSE I SPEAK FROM EXPERIENCE.

You're probably already tired of me preaching about it, but I don't think it's possible for me to stress how important it actually is. Find a system, stick to it, and I can't tell you how much more successful you'll be in your sports investing endeavors.

I've used the same money management philosophy for years now with great results and feel that it's the best one out there today. However, I can't actually take full credit for it because it was shown to me by a gentleman name Dr. Bob (Definitely check out his website by clicking here . Also check out my sports handicapper/services page to find out more about his incredible sports betting service that I highly recommend).

If you don't have a sports betting money management system yet, I would highly encourage you to check this one out. Here's a quick overview of the five steps, followed by much more in depth analysis:

Five Steps to Smart Money Management

Set Your Expectations - Set your expectations on how many games you expect to wager on during the course of the upcoming season. You'll also need to determine and set a realistic winning percentage. If you have a short or spotty track-record, then I suggest using 50% as your expected winning percentage. Next, use the chart in this section below to find the constant standard amount per game to be wagered.

Wager a Constant Unit Amount on Each Play Throughout the Season - Set a constant unit amount on each play, regardless of how well or poorly you're doing up to that point in the season. See examples in this section below on how varying your wagers on a week-to-week basis will always result in less profit during a winning season.

Incorporating a Progressive Bankroll With Constant Unit Wagers - If you have a proven track record of success (at least 56% over at least 5 years), you should then consider the money management system outlined in this section below. However, and I stress, only use this system if you have a proven long term track record.

Keep Great Records - Keeping track of what you bet on and how much is a very important key when it comes to implementing a sports betting money management system. These records will help for years to come.

A Proven Money Management System

Some of you do your own handicapping while others may use a sports betting service that has a proven track record. Either way is fine but I'd suggest making a list of the sides you're going to wager on for the weekend or week night and how much each wager will be before the games start for that day.

Once you have that list, stick to it and don't deviate from it based on how well or poorly you're doing as the games unfold. How your bets did on Wednesday night should have no influence on the games you've chosen to bet on Thursday night, or the amounts of your bets.

In my years of betting on sports, I've known many people (including myself) that will find ways to lose money even when they're having a winning season. It all comes down to having a sound sports betting money management system.

The most important aspect to any good sports bettor is discipline. Discipline is the key to picking winners in the first place and implementing a disciplined money management strategy is key in translating those winning selections into a profitable season. The problem with many sports bettors is that they lack discipline in both the games they choose to bet and the amounts they are betting.

Before following this money management strategy, I would have winning weeks but still lose money. The problem wasn't the games I was betting, but rather the way I bet them. Below is an example of someone that uses a sound sports betting money management system and someone who doesn't.

The Perfect Example

Sam, with the same bankroll plays all 5 games at $200 each, as he should. Both Jim and Sam won 3 plays while losing 2, but Jim is down $280 (wins $600 in the morning and loses $880 by doubling up on that evening's two plays), while the Sam is up $160.

On Sunday, they find 8 games they're wanting to bet on, of which 4 are early afternoon games, 3 are late afternoon games, and one is at night. Jim goes back to his $200 per game wagers and plays the 4 early afternoon games while Sam does the same, betting $200 on all 4 games.

Unfortunately, the first set of games goes 1-3 and they are each down $460 for the day. Since they've now lost 5 of there last 6 games, Jim, now down $740, backs off and decides not to bet the 3 late afternoon games. Sam, now down $300, bets all 3 games at $200 each, sticking to his sports betting money management plan.

All 3 late afternoon games are winners and they head into Sunday night with a respectable 7-5 record so far for the weekend (3-2 on Saturday and 4-3 so far on Sunday). Jim, still down $740, decides to jump back in and bet the Sunday night game for his standard $200 and Sam, now up $300, once again wagers $200 on that game.

The Sunday night game is a winner and there bets are now 8-5 for the weekend following Sunday's action. However, Jim is just 5-5 on those games because he was afraid of betting the 3 Sunday late afternoon games after losing in the morning. Actually, 5-5 is no disaster but because of doubling up on his bets for the 2 losses on Saturday night, he is down $540.

Sam bet the same on each and every game and he is now up $500 for the weekend. As it turns out, they have handicapped and feel good about a side for the Monday night game. Jim realizes that they have now won 4 straight games and this is his last chance to get even for the weekend, so he bets to win $550 (The absolute worst thing you can do when it comes to money management).

Sam also knows they've won 4 straight games, but he sticks to the plan and wagers his standard $200. The Monday night game turns out to be a losing bet and Jim ends the weekend down $1145 while Sam, betting $200 on each and every game, is up a modest $280 with there record being 8-6 (57%) for the weekend.

There are a few mistakes to be learned from the actions of Jim, all that could have been avoided with a sound money management system. His first mistake was raising his betting amount from $200 a game to $400 a game after their 3-0 start on Saturday morning. Even though they won those first 3 games, it doesn't change the chance of winning either of the 2 Saturday night games, just as losing all 3 of those games would have had no effect on the later games.

The second mistake was that he let fear affect his thinking after losing 3 of 4 games on Sunday morning (and now 5 of 6 going back to Saturday night). Jim either thought the recent losses had some effect on the Sunday afternoon games or he was afraid to lose any more money that weekend. One game has absolutely no affect on another game.

If the latter was the case, then he shouldn't have been betting as much per game in the first place (I'll approach the subject of amount to bet per game below). And, of course, the final mistake is probably the most common.

Jim bet almost 3 times his normal amount on the Monday night game in an effort to make up for his losses. Never bet on a game to bail yourself out of a hole, just accept the fact that you had a losing week and move on to the next week.

Losing is part of the process of winning and the most successful sports bettors handle losing weeks in stride and move on to the next week without changing their time-tested method of handicapping. Also, never bet extra when you are up to try to make a big score.

Like I said before, the percentage of games won up to that point in the weekend has no bearing on the chance of winning your next game and it's just plain stupid to raise your betting amount because you feel “hot". The point here is not to let greed or fear interfere with your decision making.

Your best decisions are made prior to the start of that days games, so decide which games you are going to bet beforehand and stick to that list. Decisions made during the course of the action are to often influenced by results up to that point and fear and greed can get in the way of making good decisions. Again, discipline is a very important aspect of money management.

Prepare for that days games by doing your handicapping prior to the start of the games to isolate your favorite picks. If you aren't good at deciding which games are good bets and you still insist on betting sports, then I would definitely suggest looking at my Choosing a Handiapper page where I've chosen a very select few that I feel are the best in the business (including Dr. Bob who helped originate this sports betting money management system). Top of Page

Establish a Bankroll

While having money set aside solely for the purpose of betting is a concept that makes sense, many sports betters don't have the luxury of having money that they can set aside for betting only purposes.

My advice to you is to find an amount that you can afford to lose over the course of a season that would still enable you to live the lifestyle you wish to live without stressing too much about it.

In other words, if losing $10,000 over the course of a season will put you in a serious bind, then find an amount that you could lose and still live your life without too much stress. Nobody is immune to being in the hole, no matter how good of a handicapper they are.

Trust me, even good handicappers can get in the hole. Therefore, it's important to know how much you can realistically afford to lose without getting yourself or your family in financial trouble. Once you have come up with that amount, you can consider that to be your maximum bankroll.

For those of you that do have money you can set aside to wager, pick an amount that you wish to invest knowing that it's possible to lose most of that amount. Now that you have established a bankroll, let's move on to my next concept in sports betting money management. Top of Page

Set Your Expections (and be realistic)

The idea is to use that information to determine the amount to be wagered on each game that will give you nearly no chance of exhausting your bankroll (actually I, along with Dr. Bob , use less than a 0.2% chance of going broke).

It's always best to be very conservative in estimating the percentage of winners. You may have hit 62% last year, but that's an unrealistic expectation unless that is the percentage you've been winning for years. For most bettors, I'd suggest setting your expected percentage of winners closer to 50%.

By doing so, you will give yourself even less of a chance of ever hitting bottom during the course of a season. If you have kept good records (very important) over at least the last 4 seasons and have established a winning percentage, then you can certainly use that percentage when calculating your average bet to be made during the season.

The number of wagers you expect to make is also an important part of any money management strategy since the more games that are to be played, the higher the total variance will be. For those with a statistics background, I will quickly explain the method I use to determine the amount to play on each game (this may be a little boring).

There are two meaningful results when betting on a game with a pointspread, a winning bet and a losing bet (I will ignore a push since no money is won or lost). The distribution of wins and losses is a binomial distribution with a win equal to 1 and a loss equal to 0.

Let P equal the percent chance of a victory expected with each wager and N equal to the number of games to be wagered. For the purposes of this example, let's assume that the percentage of wins expected (P) is equal to .50 (or 50%). Each wager made has an expected value of .50 plus or minus .50 (you either win or lose).

In general, the number of wins expected in N wagers is P x N with a variance equal to the square root of P x (1-P) x N. If P were equal to .50 and N were equal to 100 wagers then our expected amount of wins would be 50 (.50 x 100) with a variance of 5 (.5 x .5 x 100 = 25 and the square root of 25 equals 5).

As the number of wagers (N) gets bigger, the distribution of results, while still binomial, more closely resembles what is called a normal distribution. In a normal distribution, the chance that the result of a sample is 3 or more times the variance away from the expected value is 0.3%.

In our example with 100 wagers each having a 50% chance of winning, we are 99.7% confident that the number of wins will be 50 plus or minus 15 (3 times the variance of 5). In sports betting money management, we're concerned with not exhausting our bankroll, so it is the 50 minus 15 that we are interested in.

In this example, there is only a 0.15% chance of making 100 wagers and winning 35 or less of them. At 35 wins and 65 losses, the number of units lost is 36.5. A unit is the amount of bets won minus 1.1 times the amount of bets lost (1.1 because we must pay an extra 10% on our losses at 11 to 10 odds).

So, if you want basically no chance of losing your entire bankroll and have a 50% chance of winning each game with 100 expected wagers to be made then you should divide your bankroll by 36.5 and make that your standard bet. So, if your bankroll is $5000, then your standard bet using this example would be $137.

That number represents the amount you are trying to win on each wager and could be rounded up to $140 or down to $130 if necessary. Below I will list the percentage of your bankroll to be wagered on using varying expected win percentages (P) at varying number of wagers (N) expected to be made.

In my opinion, to have a successful long-term money management system, it is extremely important to be more conservative in estimating the percent of games that you expect to win (P). Top of Page

Wager a Constant Unit Amount on Each Play Throughout the Season

Thus, if you started the season with a bankroll of $10,000 and bet 5% of your bankroll on each game, you'd be starting the season betting $500 per game.

If you won $1000 that first week, you'd then be betting 5% of $11,000, or $550, on each game the next week. If you had lost $1000 then you'd be wagering 5% of $9,000, or $450. And as the bankroll rises and falls, so would your betting unit for that week.

The problem with this money management system is two-fold. Let's say that you are in a 10 week season and you bet 10 games per week. You start the season with a $10,000 bankroll and bet 5% of your current bankroll on each game for that week. Below is a week by week breakdown of that 10 week season in which that person won 56% of their bets.

This person profited $2,492 on a 56-44 season, but had he bet $500 per game all season long, he would have been up $3,800 ($500 x 56 - $550 x 44). The problem was that the best part of his season was the first two weeks, when he was wagering the smallest amounts per game.

Upon building a substantial profit, his worst week (the final week) came when he was betting the most. There is no reason why games in the middle or end of a profitable season should be worth a larger wager than bets made early in the season when the chance of winning each wager is the same.

How about a handicapper that starts slow and ends strong. Let's flip-flop the order of the weekly results of the previous bettor and see what would happen.

This person profited $2,454 on his 56-44 season, once again short of the $3,800 profit that would have been achieved had he bet $500 per game on every game for the season. The problem here was that the slow start lowered the amount bet per game and when this bettor had good results at the end of the season he was wagering less per game than when he started the season 2-8.

Let's take a look at an example of a sports bettor with the same distribution of weekly results in a more consistent pattern (28-22 in the first 5 weeks and 28-22 in the last 5 weeks).

Even in a pretty consistent season, this money management strategy once again fell short of the $3,800 profit that would have been won by simply betting the same amount on each game.

Basically, a sports betting money management system that adjusts the standard wager based on a fixed percentage of the current size of your bankroll each week will only achieve better results in the absence of losing weeks.

Since every handicapper has losing weeks, this strategy will rarely, if ever, outperform a money management system of betting a fixed standard amount per game for the entire season.

However, it is okay to vary the size of your wagers based on the strength of the play. To give an example, most handicappers rate there plays between 1 - 5 units. For me, a 5 unit bet should be an extremely rare bet, at the most only occurring once or twice during a season.

I prefer to make a 3 unit play my standard play, with a 2 unit play being 2/3 of that amount, and a 1 unit play being 1/3 of that amount. So, a 4 unit play would be 1 1/3 of my 3 unit amount, and a 5 unit play would be 1 2/3 of my 3 unit amount.

Once the amounts to be played on a 3 unit bet are set, I set the amounts to be played throughout the season on my 1, 2, 4, and 5 unit bets. The size of each 1, 2, 3, 4, and 5 unit wagers remain constant throughout the season. Top of Page

Incorporating a Progressive Bankroll With Constant Unit Wagers

This particular money management strategy should only be used by handicappers that have a proven, winning track record. The reason that varying the size of your standard wager on a weekly basis fails to maximize profit is because losing weeks can not be avoided during the course of the season and you will always lose more per game in the losing weeks than you will win per game in your winning weeks.

However, while even proven handicappers that win in the long run have losing weeks, it's less likely they will have a losing record for a longer span of time. This is the case because as the amount of games played goes up, the percentage of winners is more likely to approach the true long-run percentage of the handicapper.

If a true 60% handicapper picks 5 games per week to bet on, he has a 32% chance of having a losing record and losing money. However, if he bets 5 games per week for 6 weeks he has an 18% chance of losing money during that span of 30 games.

The idea of this sports betting money management system is to break the season down into sections that will give you a high likelihood of having a winning record for that span of time. Set the standard amount to wager on each game based on your beginning bankroll and adjust that amount wagered per game after each section is completed.

However, never lower the standard wager even if you've lost in the previous section. By doing this, you will not be making back less per game in a winning section of the season than you lost per game in a losing section.

If you study your past results and realize that you rarely have a losing record over a 5 week span, then break down the season into 5 week increments. If it takes 9 weeks to assure a good chance that you will have a winning record over that amount of time, then break the football season into two 9 week sections.

For my personal money management strategy, I break down the football season into four 5-week sections. Let's say I've got a bankroll of $10,000 to start the football season and I expect a winning percentage of 57.5% on 200 wagers.

From the chart outlined in part 2 of sports betting money management, I will use a constant 4.4% of my bankroll as my standard wager (my standard play is a 3 unit bet, so 3 units is equal to 4.4% of my bankroll). I will play 1/3 of that amount, or 1.5% of my bankroll for a 1 unit bet, 2.9% (2/3 of a 3 unit bet) for a 2 unit bet, 5.9% on a 4 unit bet (1 1/3 of a 3 unit bet), and 7.3% on a 5 unit bet (1 2/3 of a 3 unit bet). A 5 unit bet should be an extremely rare bet, at the most only occurring once or twice during a season.

To simplify things in this example, I will make every play a standard 3 unit bet. So, I start the season with a $10,000 bankroll and after the first 5 weeks, betting to win $440 on each game, I have made a $2,684 profit on a record of 27-19.

My bankroll is now $12,684 as I start the second of my 4 sections of the season. I can now step up the size of my wagers to reflect the increase in my bankroll after the first section of the season.

In the second 5 week section of the season I will wager to win $560 on each game. In the 5 weeks of my second section of the season I compile a record of 35-23 and make a profit of $5,432. My bankroll is now up to $18,116 as I enter my 3rd section of the season.

I am now wagering $800 per game (4.4% of $18,116). Unfortunately, I have slumped a bit and produced a record of only 26-30 in the 3rd five week section of the season for a loss of $5,600.

My bankroll is now down to $12,516, but I will retain my standard wager of $800 per game since my rule is to never lower the standard wager even if I suffered a loss in the previous section of games. In the final 5 week section, I have come back to go 27-13 for a profit of $10,160 and a final bankroll of $22,676 on a record of 115-85 (57.5%).

If the sequence of my records each section had been different, I still would have made more of a profit than had I simply wagered $440 per game for the whole season, which would have resulted in a final bankroll of $19,460.

The worst result using this method would have been to start the season with my best section (27-13) followed by the 35-23 section, the 27-19 section and then ending with the section that resulted in a losing record of 26-30. But even then the final bankroll would have been $19,579, which is still a bit better than having played the same amount on each game throughout the season.

Remember, this method should only be used by handicappers with a proven long-term track record of actual winning seasons wagering on sporting events. I suggest at least 56% winners wagered over a 5 year period. If those qualifications do not fit you, then you should wager a constant standard amount per game as outlined in parts 2 and 3 of sports betting money management. Top of Page

Keep Great Records

I prefer to use a spreadsheet, but whatever works best for you is fine. By keeping track of everything, you can always look back to compare how you've done year after year. If you don't know where you've been, then you'll have no idea where you're going.

It may take you a few more minutes but in the long run it will pay off big time. You'll be able find consistent mistakes you've been making and correct them. I can assure you that you'll never become a successful sports handicapper if you don't keep track of every bet when following a strict money management policy.

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