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The Kelly Criterion

The world of betting is full of theories and systems which promise a lot of profit. However, it is important to understand that not all theories work for everybody. Furthermore, in order to be able to master the most elaborate betting systems and theories, you need to know your basics. Beginner betters should avoid complex betting systems while they learn the undergoing of the betting world. Today, we are going to explain the Kelly Criterion, which is a great system for people who are good at comparing the values of bets. The purpose of this system is to size the value of the bets based on the value offered by the bookies.

The Kelly Criterion The Kelly Criterion Picture
  • The basics

Money management is a very important skill for a professional better. Before trying out the Kelly Criterion, we advice you to look up some information on the how to manage your betting money. You should also know a lot of things about probabilities and sport analyses. The system that we plan to teach you is a money management system which is aimed at optimizing the potential to win money at the expense of the extra risk. In simple words, it teaches you how to determine the right amount of your betting bankroll which should be wagered on a bet.

  • The mathematical formula

This betting system is based on a simple mathematical formula: BR%= (P*B) -1 / odds -1. In this formula P stands for the winning probability (in a decimal format), B stands for the odds offered by the bookie and BR% is the percent of the betting bankroll that we should wager on a bet. This formula should have a positive result which shows how much money you should place on your chosen bet. For example, lets say that you plan on betting on a game for which your bookie set the odds at 1.91. After you do your analyses on the upcoming game, you deduce that the winning probability is 55%. In this case, the Kelly formula should look like this : BR%+ (0.55*1,91) – 1/( 1.91-1)= 5.5495%. This means that you must bet 5,5495% of your betting bankroll.

  • Kelly Criterion Tips

As we mentioned above, this betting system is not recommended for beginners. In order for the system to be productive, you must determine the exact probability of your chosen team’s victory. If the probability is too small, the formula will have a negative response which means that the bet should not be placed.

  • Analyzing sport events

Professional betters use a lot of statistics and sometimes even software in order to analyze sport events. In order to obtain an accurate probability of winning, you need to take into account numerous factors like past performance, sport news and so on. If you are the kind of person who enjoys the thorough research and usually comes up with accurate probabilities, than the Kelly Criterion should be a nice fit for you. However, if you are a beginner and you don’t have a lot of free time to research sports statistics, then you are better off with a flat betting system. As a better, it is important to know your limitations and not to adventure yourself in things that you cannot handle.

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