Bankroll management applies to any form of gambling. In sports betting, poker and casino there is a great deal of variance so if you are betting too big a percentage of your bankroll you will inevitably go broke!
I’m going to start this article by outlining good bankroll management for each form of wagering we talk about here at BetOnIt.org (sports betting, poker and casino). After stating the bankroll management system I will proceed to explain why.
Bankroll Management System
Sports Betting – A unit should be about 1% of your total sports betting bankroll and you should never bet more than 5% on a single wager.
Poker – If playing no limit cash games you should always have 20 times the max buy-in for a cash game in your bankroll. So if you are playing at the $1-$2 tables that have a $200 buy-in you should have at least $4,000 in your poker account.
In limit games you should have at least 300 times the big blind because it’s not possible to lose an entire buy-in on one hand.
For sit and go’s you should always have at least 40 times the SNG buy-in in your account. So if you’re playing $10 + $1 SNG’s you should have at least $440 in your account.
At multi-table tourneys you should really have 100 times the buy-in in your account because with larger fields there is much more variance than in sit and go’s.
Casino – I’m going to be honest here. At the casino you are going to lose your money overtime (sports betting and poker you can be a long term winner). For this reason I don’t care as much about variance. Basically just play with what you can afford to lose and bet amounts based on how much entertainment you want to get out of your money.
How Variance Kills Bankrolls
Many very skilled sports bettors and poker players continually lose money because they don’t follow basic bankroll management principals. Even if you are a sharp sports bettor or a shark at the poker tables if you get greedy and bet too much of your bankroll you will eventually go broke. It’s simple mathematics. Then you will reload your account, get greedy again and inevitably go broke. A sports bettor can win 65% of their bets against the spread, but continually lose money to the bookie based on poor bankroll management. This is why online sportsbooks generally have no problem promoting their site to bettors they know are sharp. Human nature will often take over and a sharp bettor who is winning will start to think they are holding themselves back by not betting more and making the maximum they can with their skill.
Let’s look at an example:
Say John is betting 5% of his bankroll on every bet. He has $1000 in his account. He places 5 $50 bets on the NFL on Sunday and goes 4-1. Boom, John now has $1150 in his account (not accounting for vig)! The next week John continues with our 5% system and bets 5 games for $50 each. He wins 4 again bringing his roll to $1300. The next week he decides he is leaving money on the table so he ups his bets to $200 (about 15% of the bankroll) and once again bets 5 games. This time he goes 1-4 and just like that he is down to $700. Instead of learning from his mistake and dropping back down to $50 or even $35 now, John wants to earn the money back so he puts $175 on 4 games. Loses them all and he’s broke. That’s after going just 1 game below .500 over four NFL Sundays. This happens all the time.
If you are betting too much of your bankroll you will inevitably run into a bad spell and go completely broke. It happens to the best sports bettors in the world. There is no reason to think it won’t happen to you.
This same example can be said about playing online poker.
Follow the guidelines listed above and if you are a winning sports bettor or poker player you will make money overtime. If you throw bankroll management out of the window, mark my words: You Will End Up Broke.