Avoid the Vig
One of the biggest mistakes novice bettors make is through their bankroll management. These individuals have a tendency to get too excited about a play and they bet more than they should. This strategy is reckless and will inevitably cripple their bank account. In order to combat this pitfall, the bettor needs to institute a bankroll management strategy that will limit their liability and promote winning in the long-term.
There are multiple approaches to bankroll management that can utilized, but the most effective ones utilize the principles of the Kelly Criterion. Ultimately, the Kelly Criterion suggests that you bet 1-5% of your bankroll per play.
The two types of approaches Avoid the Vig recommend are the Flat-Betting Approach and the 2-3% Unit Play.
One of the easiest to implement approaches is the flat-betting system. The flat-betting system dictates that each and every play is the exact same amount regardless of confidence level. The flat-betting approach also institutes the Kelly Criterion of a 1-5% play in relation to one's bankroll. This style of betting will limit your downside, but also restrict your upside, because the bettor does not bet more on the plays they feel have a higher positive expected value.
2-3% Unit Plays
2-3% unit play also adheres to the Kelly Criterion principles, but offers more upside on plays that he or she feels they have a stronger positive expected value. If you have a bankroll of $1,000, a normal bet would be between $20-$30. In the 2-3% Unit Play System, a normal bet size might be $20. The ones he or she feels more strongly about would be a $30 play.
The Martingale System is NOT an acceptable bankroll management strategy. Inevitably, someone will suggest this to the novice bettor and they will be hoodwinked into thinking its a fail-safe approach. The Martingale System implies that the bettor keeps doubling the amount of their bet until they win. To truly understand the methodology and the inherent risk, let us offer an example:
The bettor has a bankroll of $1,000. According to Kelly Criterion, they should bet between 1-5% ($10-$50) per game. Let's say that the bettor wants to bet $25 per bet. If the bettor loses, according to the Martingale System, they bet $50 on the next game. If they lose that, then they would bet $100. If they keep on losing:
Bet 1: $25
Bet 2: $50
Bet 3: $100
Bet 4: $200
Bet 5: $400
Bet 6: $800
Bet 7: $1600
If the bettor loses six straight times, they do not have enough money to fund the seventh bet unless they reach back into their wallets. If you think that you would never lose seven bets in a row, you clearly have not bet long enough. Even the most experienced sports bettors have down weeks. It is not overly uncommon to go 0-10. It happens and if you are implementing the Martingale technique, you could be in trouble fast. Worst part about it? Under this scenario, bet 7 would be $1,600 to win a whopping total of $25.
Again, the Martingale System is NOT an effective strategy to win long term.
SEE THE REST OF OUR BETTING 101 SERIES