There’s nothing wrong with recreational gambling, but if you’re betting on fights with the objective of making significant amounts of money in the long-term, then bankroll management is a serious consideration.
What is a Bankroll?
A bankroll is the amount of money you’ve set aside specifically for betting. The size of your starting bankroll is completely up to you, but it should be an amount that you can afford to lose with no negative consequences to the rest of your life.
Personally, I think you should start small. This way, if you blow your entire bankroll then it’s not a big problem. It’s not uncommon for bettors to lose their bankroll multiple times before they start getting the hang of things and making consistent profits – so don’t beat yourself up.
At the beginning your primarily goal is to invest in building a skill, not to generate meaningful amounts of cash straight away.
Betting With Units
Dividing your bankroll into units is important, so that you’re betting consistent amounts on each fight and not putting yourself at risk by making disproportionately large plays. 1 unit should represent 1% of you bankroll, so if you have a starting bankroll of $1,000 dollars, then your unit size is $10.
As you get more experienced, you may want 1 unit to represent a smaller or larger percentage of your bankroll – but 1 unit for 1% is a good starting point.
As your bankroll grows, you may wish to update your unit size every weekend (this is known as a dynamic bankroll). For instance, if you have a starting bankroll of $1,000 and you win $200 on your first weekend, then next weekend you can increase your unit size from $10 to $12.
Conversely, if you lose $200 on your first weekend, you could change your unit size from $10 to $8. The disadvantage to this type of bankroll is that it would take longer to win back your losses after a bad run.
Personally, I like to increase my unit size after I hit specific profit milestones, but I’m also willing to drop my unit size when I encounter a rough patch of form and want to regain my confidence.
If you’re wondering how many units you should risk per bet, there are a number of different approaches to take. I will mention the two most common ones here.
The Flat Betting Method
Although I’ve never used this method myself, it can be a good foundational approach if you’re new to sports betting.
With a flat betting system, every play you make should be 1 unit – irrespective of the odds or how confident you are in the outcome.
The system is extremely straightforward and if you’re not the most risk tolerant person, it’s soothing to know that you’re not staking a significant percentage of your bankroll on every single MMA event.
The main drawback of this approach is that you could be leaving money on the table by not wagering more money on superior betting opportunities.
The Confidence Method
With this approach, every bet you make should be between 1 to 5 units total. The amount you bet depends on two variables:
- How confident you are in the outcome
- How much of an edge you’re getting (the difference between where you cap the fight and where the bookmaker has lined it)
Some handicappers use the Kelly Criterion to help them determine how many units to wager on each bet, but I’m not going to discuss it as it’s not something I’ve personally used.
While I don’t recommend betting more than 5% of your bankroll in one go, the amount you stake on each fight depends on your risk tolerance and betting style. In other words, it’s subjective.
Personally, I bet between 1 to 3 units on most of my wagers and use 4 and 5 unit bets sparingly. If you’re regularly betting 4 or 5 units at a time (or even more), a losing streak can decimate your bankroll quickly.
I can’t tell you how many units to bet per fight, but I can give you some food for thought. I regularly talk to a couple of well known handicappers online, both of whom are long-term winners with very different betting styles.
This handicapper uses a conservative betting style. Irrespective of value, he will only bet fighters he favors to win outright.
In most cases, he will play significant favorites and only touch underdog up to the +150 range. He will typically risk 0.5 units on underdog bets, and only risk multiple units on favorites that he deems to have an extremely strong chance of winning.
If you were to read our conversations, the issue of trust comes up a lot. I will bet an underdog if I feel I’m getting an edge over the bookmakers in terms of implied probability with the full knowledge that I may lose, whereas he would only make the same bet if he trusted the fighter to go out and absolutely demolish the opponent.
For me, confidence in the outcome of the fight and the value I’m getting on the betting line are equal factors in my decision making. For him, confidence in the outcome is the more significant factor when deciding to place a bet.
The downside to my approach is that I’m taking more risk with each bet, the downside to his approach is that because he’s playing steeper odds, he has to win a higher percentage of his bets to turn a profit.
This handicapper is primarily concerned with getting an edge over the bookmakers and plays underdogs more often than favorites.
Many of his bets are on underdogs that he doesn’t necessarily favor to win outright, but that he feels have a more significant chance of winning than the bookmaker’s line implies. These type of wagers are commonly known as ‘value bets’.
While I may drop 0.5 units here and there on a +175 underdog that I feel should be lined closer to a pick ‘em, these type of plays represent a more significant part of Handicapper B’s overall strategy and he’ll bet them for multiple units.
Because Handicapper B is focused on underdogs, he has to win a lower percentage of his plays to turn a profit. However, in a zero sum game like sports betting, this approach invites more volatility into your results.
For instance, in the 2018 UFC Moscow card, many heavy favorites underperformed, yet still walked away victorious.
In terms of expected value, Alexey Kunchenko (-440), Petr Yan (-1200), Rustam Khabilov (-840) and Mairbek Taisumov (-600) were all terrible bets, yet you would have walked away empty handed by betting against them.
As the famous adage states: “You can’t eat value”.
On the spectrum of conservative to volatile betting styles, I fall somewhere in the middle. Whether the fighter has a “+” or “-” symbol next to their name, I’ll take the value however it comes.
I do like to get a more significant edge over the bookmakers when I’m betting underdogs. This is because underdogs are more likely to lose, and thus I need the reward to be worth the risk.
For instance, if I cap a fighter’s chance of winnings at 50% yet his odds are +150, this gives me a 10% margin over the bookmakers and I may play it for 0.5 units.
However, if I cap a fighter’s chance of winning at 60% and his odds are +100, the edge is still 10% but I would probably place a larger wager of 2 or so units.
In both scenarios the edge is still 10%, but when I perceive a higher likelihood of victory for my fighter, it justifies a heavier stake.
Offense and Defense
My staking strategy also depends on recent results.
If I’m on a hot streak, I’m more encouraged to bet a higher volume of plays and place bigger stakes on underdogs with wide lines that I don’t favor outright. If I’m on a rough patch of form, then I will focus more on fighters I strongly favor to win and cut down on value bets in order to (hopefully) reduce volatility from my results.
I compare this to playing offense and defense. Expected value is still at the forefront of the game, but I consider it wise to adapt your strategy and ride the rhythm of your recent results.
Betting hyper-aggressively when you should be toning it down and playing conservatively is one of the worst ways to exacerbate a losing streak.
Sports betting is not an exact science. If you ask ten different gamblers their philosophy on bankroll management and staking, you’ll get ten different answers.
You can win with almost every style of betting, you just need to figure out what works for you. I was profitable when I used to haphazardly bet -EV parlays every weekend, but I’m a lot more profitable now that I bet with consistent units and my focus is on finding edges rather than ‘locks’.