The National Basketball Association (NBA) is a popular league for sports bettors, and the Kelly Criterion can be an effective tool for managing bankroll and making informed betting decisions. For example, in the 2019-2020 season, the Milwaukee Bucks had an impressive record of 56 wins and 17 losses, with a winning percentage of 76.7%.
Suppose a bettor believes that the Bucks have a 70% chance of winning a particular game, and the sportsbook is offering odds of 1.5 (3/2) on the Bucks to win. Using the Kelly Criterion formula, the bettor would calculate the optimal bet size as follows:
f = (0.70 x 1.5 – 0.30) / 1.5
f = 0.30 or 30% of their bankroll
This means that the bettor should wager 30% of their bankroll on the Bucks to win. If the bet is successful, the bettor would win £45 for every £30 wagered.
Football is another popular sport for sports bettors, and the Kelly Criterion can be used effectively in this sport as well. For example, in the 2019-2020 English Premier League season, Liverpool had an impressive record of 32 wins, 3 draws, and only 3 losses, with a winning percentage of 84.2%.
Suppose a bettor believes that Liverpool has a 60% chance of winning a particular game, and the sportsbook is offering odds of 1.8 (4/5) on Liverpool to win. Using the Kelly Criterion formula, the bettor would calculate the optimal bet size as follows:
f = (0.60 x 1.8 – 0.40) / 1.8
f = 0.20 or 20% of their bankroll
Read our detailed guide about how it can be applied to football betting to maximize returns while minimizing risk.
Tennis is a popular sport for sports bettors who are interested in individual matches rather than team sports. For example, in the 2021 Australian Open, Novak Djokovic was the favorite to win the men’s singles championship, with odds of 1.90 (9/10) at many sportsbooks.
Suppose a bettor believes that Djokovic has a 70% chance of winning a particular match, and the sportsbook is offering odds of 1.90 (9/10) on Djokovic to win. Using the Kelly Criterion formula, the bettor would calculate the optimal bet size as follows:
f = (0.70 x 1.90 – 0.30) / 1.90
f = 0.34or 34% of their bankroll
Horse racing is a popular sport for sports bettors who are interested in the excitement and unpredictability of this unique and thrilling sport. For example, in the 2021 Kentucky Derby, Medina Spirit was the surprise winner, with odds of 12.00 (11/1) at many sportsbooks.
Suppose a bettor believes that Medina Spirit has a 10% chance of winning the Kentucky Derby, and the sportsbook is offering odds of 12.00 (11/1) on Medina Spirit to win. Using the Kelly Criterion formula, the bettor would calculate the optimal bet size as follows:
f = (0.10 x 12.00 – 0.90) / 12.00
f = 0.005 or 0.5% of their bankroll
These are just a few examples of how the Kelly Criterion can be used effectively in sports betting, with specific examples from different sports and leagues. By using the Kelly Criterion formula to determine the optimal size of their bets, sports bettors can maximize their potential returns while minimizing their risk of ruin.
Remember to calculate your edge, adjust your bet sizes based on your confidence in a given wager, and use the Kelly Criterion in conjunction with other betting strategies and best practices. With practice and experience, you can use the Kelly Criterion to become a more successful sports bettor and make more informed and rational betting decisions.
The Kelly Criterion uses a mathematical formula to calculate the optimal size of a bet based on the bettor’s perceived edge and the odds offered by the sportsbook. The formula is f = (bp – q) / b, where f is the optimal bet size as a percentage of the bettor’s bankroll, b is the decimal odds offered by the sportsbook, p is the bettor’s perceived probability of winning, and q is the probability of losing.