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Beating Sportsbooks with the Kelly Criterion: A Smart Approach to Bankroll Management

Updated February 24, 2025 | 8:16 am CDT by Sam Smith

A key component of profitable sports betting is knowing how much to wager on each bet. Even if you consistently find Portfolio EV to maximize long-term profitability.

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Kelly Criterion in Sports Betting: Beat the Books With Bet Sizing

The Kelly Criterion is a formula developed by John L. Kelly Jr. in 1956 to determine the optimal bet size that maximizes long-term growth while minimizing the risk of bankruptcy. The concept has since been widely adopted in gambling and investing, including sports betting.

Proper bet sizing helps bettors avoid devastating losses even when making profitable bets over time. The Kelly Criterion ensures you bet proportionally to your edge, preventing reckless overbetting and inefficient underbetting.

The Kelly Criterion Formula

The basic formula for the Kelly Criterion is: f*= p – q/b

Where:

  • f* = Fraction of bankroll to bet
  • b = Net odds received on the bet (e.g., if the odds are +200, b=2)
  • p = Probability of winning the bet
  • q = Probability of losing the bet (1-p)

For example, if you find a bet with +150 odds (implying b = 1.5), a 55% probability of winning (p = 0.55) and a 45% probability of losing (q = 0.45), the optimal bet size is: f* = 0.55 – (0.45/1.5) = 0.25

This means you should bet 25% of your bankroll on this wager.

Practical Steps to Using the Kelly Criterion

Estimate Probability Accurately

The biggest challenge in using the Kelly Criterion is accurately estimating probabilities. If your probabilities are off, the formula may suggest bet sizes that are too aggressive. Using Portfolio EV and historical data can help refine these estimates.

Use a Conservative Approach (Fractional Kelly)

Many bettors use a fractional Kelly strategy, such as half-Kelly (50% of the recommended bet size), to reduce variance and avoid large bankroll swings. This is particularly useful in high-variance sports betting markets.

Track and Adjust Over Time

Keep a detailed record of bets, odds and bankroll changes. If your edge is consistent, the Kelly Criterion will compound your bankroll efficiently. If results suggest miscalculated probabilities, refine your approach. Luckily for you, Portfolio EV has a Bet Tracker to simplify the process for you.

Automate Bet Sizing with Portfolio EV

Portfolio EV uses your total bankroll to recommend the amount you should allocate for each bet. This allows you to bet robotically with Kelly Criterion principles and place your bets quickly with the Mass Entry Tool.

Real-World Example of the Kelly Criterion in Action

Assume you’re betting on an NFL game and find a bet with +200 odds where Portfolio EV suggests a 40% win probability. Using the formula:

f* = 0.40 – (0.60/2) = 0.1

This suggests wagering 10% of your bankroll. If your bankroll is $1,000, your bet should be $100. If using a half-Kelly approach, you’d bet $50.

Conclusion

The Kelly Criterion is one of the most effective bankroll management tools in sports betting. By using it in conjunction with Portfolio EV to identify +EV bets and applying fractional Kelly to manage risk, you can maximize long-term profitability while protecting your bankroll.

Smart bettors don’t just focus on picking winners — they also bet strategically. Mastering the Kelly Criterion in sports betting is one of the best ways to gain an edge over sportsbooks.

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Sam Smith

Author

Sam Smith

Sam Smith is a writer and editor with Stokastic and OddsShopper. He has been immersed in the world of professional sports data since 2015 while also writing extensively on the NFL for a multitude of blogs and websites. With OddsShopper, Sam looks to blend his sports and editorial expertise with OddsShopper's data to bring you the best betting information possible.

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