Bankroll Management & Using Staking Plans

Bankroll Management

Bookmakers don’t take wagers as some kind of public service, they do it because it’s a profitable line of business. Why is it so profitable? Well, it’s ultimately because they’re the ones that get to set the odds, which allows them to effectively build in a profit margin on every wager they take in.

The bookmakers’ advantage CAN be overcome though. Successful sports bettors are typically very knowledgeable about the sports they bet on and about all the strategy involved in betting too. They know that they have to work very hard to be successful, and they’re not afraid to put that hard work in. Best of all, they recognize the importance of managing their money correctly.

Money management is arguably the single most important skill required to be a successful sports bettor. This skill is more commonly referred to as bankroll management, and in this article we’re going to teach you all about it. We start by explaining what’s involved, and then highlight its importance by detailing the benefits it has to offer. We also look at the dangers of poor bankroll management, and offer some useful advice for managing a bankroll effectively. This advice includes details of the various staking plans that can be used.

Before we continue, we need to make one point very clear. Please don’t think that bankroll management is only important for those who are specifically trying to make a profit from their sports betting. It’s important for ALL sports bettors, regardless of whether they bet primarily for profit or primarily as a form of entertainment. Poor money management not only decreases your overall chances of making a profit, but it also increases your chances of having an unpleasant experience.

What is Bankroll Management?

Bankroll management can be broken down into three stages.

  • The first stage requires us to set a budget for how much money we’re prepared to risk losing, and then allocate that sum of money to be used solely for the purposes of betting on sports.
  • This next stage involves establishing a set of rules that determine how much we should stake on any given wager. These rules should be based on our overall budget, the way we bet and our betting goals.
  • The final stage is to apply the rules defined in stage two. This is an ongoing process, as these rules should be applied to every single wager you place.

The sum of money we allocate in stage one is known as a bankroll. This is where the term bankroll management comes from. The rules for how much we should stake on wagers are known collectively as a staking plan. There are different types of staking plans to choose from, but we will get to that later.

As you can see, bankroll management is actually very simple. Well, in principle at least. The first two stages are certainly straightforward, and easy enough to do. The third stage is the hardest, especially for those who aren’t especially disciplined when betting on sports.

We offer some advice for each of these stages later in this article. Before we get to that, though, we explain why bankroll management is crucial for sports bettors.

Why is Bankroll Management SO Important?

The simple answer to this question is that bankroll management helps you gamble responsibly. When applied properly, it ensures that you bet within your means and don’t risk money that you can’t afford to lose. This alone makes bankroll management extremely important, as no-one should gamble with the money that they need to pay their bills or other living expenses. There are other valuable benefits of using effective bankroll management too.

  • It ensures that we don’t chase our losses when on a losing streak.
  • It prevents us from getting carried away and staking too much when on a winning streak.
  • It allows us to withstand multiple losses without running out of money.
  • It enables us to make better and more rational betting decisions.

Let’s address these four benefits one by one.

Bankroll Management and Losing Streaks

All sports bettors go on losing streaks from time to time. We’ve been on plenty, and we consider ourselves very good at we do. They happen to even the most successful bettors in the world, and they obviously happen to those who bet for fun too. There are going to be times when nothing goes as expected and you feel as if you’re just losing one wager after another. Losing control and chasing your losses becomes very tempting at this time. People often resort to increasing their stakes, hoping that they’ll win everything back when their luck eventually turns around. This usually ends badly.

By employing sound bankroll management, and having a fixed set of rules about how much to stake, you are more likely to resist the temptation to chase losses when on a losing streak. You still need to be disciplined enough to stick to those rules of course, but simply having them in place makes this a LOT easier.

Bankroll Management and Winning Streaks

A similar principle applies when on a winning streak. These also happen to everyone. Even recreational bettors enjoy periods when they seem to get everything right, and win virtually every wager they place. Winning streaks are something we all look forward to, but they do have their potential downsides.

It’s not uncommon for people to increase their stakes significantly when on a winning streak. This could be the result of a boost of confidence or greed. Either way, it’s as much of a mistake as chasing losses. It could easily result in you giving back all previous winnings by the time the streak comes to an end. Again, good bankroll management will prevent this from happening.

We should point out there’s nothing wrong with increasing your stakes incrementally as your bankroll grows. That’s absolutely fine, and a proper staking plan will ensure this is exactly what you do. It’s SIGNIFICANT increases that are the problem, because just a few losses at much higher stakes can decimate a bankroll pretty quickly.

Bankroll Management and Withstanding Losses

The third benefit is similar to the first one really, in that it’s also related to dealing with losing streaks. Bankroll management does more than just stop you from chasing your losses during these streaks though. With a proper staking plan in place, the amount you stake will always be linked in some way to the size of your bankroll. If your bankroll starts to decrease due to a run of bad luck (or because you’ve made some bad decisions), then the amount you stake will decrease also. This will prevent you from losing too much money too quickly.

If you’re betting with the goal of making a profit, then protecting your bankroll in this way is vital. If you keep staking the same amount even as your bankroll decreases, losing everything becomes a real possibility. By only staking a small percentage of your bankroll, you should be able to avoid going bust. When losses are the result of bad decision making, this should give you the opportunity to address your mistakes and make any adjustments to the strategies you’re using.

Decreasing your stakes is also beneficial if betting is just a form of entertainment for you. It will make your bankroll last longer, which will effectively give you more entertainment for the same amount of money.

Please Note:

Bankroll management can’t actually prevent you from losing money. It will slow down the rate at which you lose, but if you lose pretty much every wager you place then you’re still going to lose your whole bankroll eventually. This isn’t necessarily a problem if you’re betting with money that you can afford to lose, and if you’re not too concerned about making a profit. However, if your goal is to make money and you find yourself losing your entire bankroll, then take a step back and carefully consider your overall approach.


Bankroll Management and Rational Decisions

Good bankroll management can make the financial aspect of betting less relevant, which helps with making rational decisions. Although this might seem counter-intuitive, the fact is that you shouldn’t focus directly on how much money you might win or lose on any given wager. Your focus should be entirely on trying to make good betting decisions. This is MUCH easier to do if you’re not worried about the money involved.

Focusing too much on the money causes people to make their selections for the wrong reasons. They might consistently back “safe” selections, to reduce the risk of losing. Or they might consistently go for longshots, trying to win big amounts. Neither of these approaches are particularly sensible, and they’re certainly not based on rational thinking. Instead, a dedicated bankroll should be viewed purely as a tool for betting.

We realize this last benefit is more valuable for serious bettors than it is for recreational bettors, but even those who bet for fun should try to think rationally as they go through their decision-making process. It’s almost guaranteed to lead to better results in the long run, which is obviously a good thing regardless of someone’s reasons for betting.

To further demonstrate the importance of bankroll management, we’ll now take a look at the potential dangers of NOT managing a bankroll effectively.

The Dangers of Poor Bankroll Management

We’re going to come away from sports betting for a moment, and talk a little bit about poker. The reasons for this will become clear shortly.

There are many poker players who could legitimately be labelled as legends of the game. Johnny Moss, Chip Reese, Doyle Brunson and Phil Ivey are a few of the names you’ve probably heard of. All truly excellent players, and each one of them has been referred to as the best player the game has ever seen.

There are other players who have been considered the best at one time or another too. It’s unlikely that there’ll ever be a consensus as to who was genuinely the greatest of them all, but there’s one player who you’ll find in virtually everyone’s top five. And that’s Stu Ungar.

Stu Ungar was excellent at poker, but poor at bankroll management

Stu Ungar was an incredibly talented gambler. He was perhaps best known for his abilities at the poker table, but he was even better at gin rummy. He won millions of dollars in his lifetime, and yet he died broke. His story is an interesting one, but it also serves as a cautionary tale for other gamblers.

You see, Stu Ungar COULD have amassed a fortune with his gambling abilities. The reason he didn’t was simple; he was unable to manage his money properly. Throughout history, there have been many other gamblers who have suffered from the same problem. They’ve gone bust from their gambling exploits not because they weren’t skilled enough or knowledgeable enough, but for the sole reason that they didn’t practice good bankroll management.

Why are we telling you all this?
So that you don’t make the same mistakes.

The benefits that we outlined earlier SHOULD be enough to encourage anyone to learn proper bankroll management. However, we want to be certain that we’ve done our absolute best to convince our readers that bankroll management is VITAL. We feel that highlighting the plight of Stu Ungar is a good way to do this.

Forget the fact that Ungar was a poker player rather than a sports bettor. That’s irrelevant to the underlying point here. If a gambler as talented as he went bust due to poor bankroll management, then the same thing can happen to anyone.

What we are trying to stress here is that it can and will happen to you. If you don’t learn how to effectively manage a bankroll, you WILL go bust at some stage. It’s inevitable. Without proper bankroll management, your chances of making a long-term profit are essentially zero. And even if you’re only betting for fun, your chances of truly enjoying yourself are greatly reduced.

Now that we’ve done all we can to emphasize just how important bankroll management is, we’ll offer some advice for each of the three stages we mentioned earlier.

Allocating Your Bankroll

The first stage of bankroll management is easy. All you have to do here is set aside a sum of money to be used specifically for betting purposes. The actual amount is entirely up to you, of course, but it MUST be affordable. Basically, this needs to be money that you feel comfortable losing, if it comes down to it.

When betting for fun, you might want to consider simply setting a weekly or monthly budget for how much you’re prepared to lose. Keep accurate records of how much you win or lose, and stop if you ever lose your full budget in any given week or month.

When betting more seriously, you should ideally separate your bankroll from your day to day to funds. One way to do this is to deposit it across the different betting sites you use. Alternatively, you could use an e-wallet, or even open a new bank account.

With this stage completed, it’s then time to choose a staking plan.

Choosing a Staking Plan

Staking plans are the rules that define how much you stake on each wager. There are many different types of plan, but they can all be broadly categorized as one of the following two types.

  • Fixed staking plans
  • Variable staking plans

Fixed Staking Plans

Fixed staking plans are the most straightforward. They’re very easy to use, which means they’re ideal for recreational bettors and/or beginners. There are two basic options: level staking and percentage staking.

Level staking is easy; you stake the exact same amount for every wager you place. This needs to be a sum that you feel comfortable risking on a single wager, and should be a very small proportion of your overall bankroll or weekly/monthly budget. While most people will advise you to keep this between 1-5%, we typically recommend staying at 2% or below. If you’re willing to accept the higher level of risk or if you’re mainly backing big favorites, then it would be fine if you went a little higher. Anyone who prefers to limit their exposure to risk or who tends to back mostly longshots should try to stay below that 2% mark.

Here are a couple of examples of how level staking plans can be used.

We have a monthly budget of $500, and are quite risk averse. We set our stake at $5, which is just 1% of our budget. We stake $5 on every wager, and stop completely if we lose $500 in any month.
We have an allocated bankroll of $1,000. We back mostly favorites, and we’re happy risking 2.5% of our bankroll when we bet. 2.5% of $1,000 is $25, so that’s how much we stake on each wager. We stake that much until our bankroll runs out, at which point we top it off if we can afford to do so.

The only real disadvantage with level staking plans is that they don’t account for how much we’ve previously won or lost. We just keep on staking the same amount regardless. So if we lose a big chunk of our bankroll, the amount we continue to stake will represent a much higher percentage than we started with. If we increase our bankroll through winning, the amount we continue to stake will be a lower percentage than we started with.

It’s therefore advisable to readjust the size of your stakes periodically when using a level staking plan. Alternatively, you can just use a percentage staking plan, which effectively does this automatically. With this type of staking plan, you simply stake a fixed percentage of your bankroll every time. Here’s an example.

We have a starting bankroll of $1,000, and decide to set our percentage stake at 2%. Our first wager is $20, as this is 2% of $1,000. For each subsequent wager, we calculate 2% of whatever remains in our bankroll. So, if it’s $900, our stake is $18. If it’s $1,100, our stake is $22.

The advantage here is that we automatically stake less when our bankroll drops, and more when our bankroll increases. Although this makes things a little more complicated, we think that percentage staking is marginally better than level staking overall. Level staking is still a perfectly acceptable option though.

Variable Staking Plans

Variable staking plans are more complex. Our stakes are also based on the size of our bankroll with these, but they vary depending on certain criteria such as confidence level or potential return.

With a staking plan based on confidence level, the amount we stake would depend on how confident we were about a wager’s chance of success. So, we might stake 1% of our bankroll with low confidence, 2% with medium confidence, or 3% with high confidence.

With a staking plan based on potential return, the goal is to win roughly the same amount for every wager. This amount should be a fixed percentage of our bankroll, to ensure that we don’t stake too much relative to how much we have to bet with. The exact amount we spend depends on the odds of the relevant selection. Higher odds mean lower stakes, while lower odds mean higher stakes.

Either of these plans are fine to use when betting seriously. You just have to be willing to come up with a set of rules that both comply with the plan and work for you. We don’t recommend them for beginners or recreational bettors though, because there’s no need to complicate things in this way. Sticking with fixed staking plans is the better approach.

Another option with variable staking is to vary stakes based on previous results. We have two options here. We can increase stakes incrementally after a loss, and decrease them after a win. Or we can do it the other way around, increasing stakes after a win and decreasing them after a loss. We don’t especially like either of these options, and would rather see you NOT use this type of plan.

The final type of variable staking plan to mention is the Kelly Criterion. This is widely used by serious bettors, although it splits opinion. Some people claim that it’s hands down the best staking plan to use, while others claim it serves no real purpose. Our view is somewhere in the middle. We think that it definitely has some merit, but we’re not convinced it’s the very best plan to use. You can make your own mind up though, as we cover exactly how it works in this article.

This staking plan involves varying stakes based on expected value. It’s important that you understand the basic concept of expected value as it applies to betting. Otherwise the plan won’t make much sense at all.

Using the Kelly Criterion involves applying a mathematical formula to calculate the size of our stakes. The formula is as follows.

(bp – q) / b = f

That obviously doesn’t mean much by itself. Here’s what each of the letters in this formula represent.

  • “b” – the multiple of our stake we can potentially win.
  • “p” – the probability of winning.
  • “q” – the probability of losing.
  • “f” – the fraction of our bankroll we should stake.

The multiple of our stake we can potentially win is obviously related to the odds of the relevant selection. It’s easiest to work with odds in the decimal format here, as we simply deduct from the decimal odds to tell us the multiple. So if the odds are 3.30, then the multiple of our stake we can potentially win is 2.30. If the odds are 2.10, then the multiple is 1.10. And so on.

If you’re more familiar with other odds formats, please use our odds convertor to convert the odds into the decimal format. It just makes things more straightforward.

The probability of winning is our own assessment of how likely we think a wager is to win. If we were betting on a tennis player to win an upcoming match, for example, we’d have to decide how likely he is to win. We should first calculate this as a percentage, and then divide that percentage by 100 to get the number to use in this formula. So if we believed this tennis player had a 60% chance of winning, we’d use 0.60 (60/100).

The probability of losing is easily calculated. If we’ve given this tennis player a 60% chance of winning, then he obviously has a 40% of losing. We again divide the 40 by 100, to give us 0.40 in this case.

Once we’ve determined how much we can potentially win and the relevant probabilities, we then apply the formula. The result of the calculation tells us what fraction of our bankroll we should then stake.

We’re fully aware that this all sounds very complicated. It’s actually a lot more straightforward than it seems at first, so let’s use an example to demonstrate. We’ll continue with the tennis match we referred to above. Let’s say it’s a match between Andy Murray and Rafa Nadal; we give Andy Murray a 60% chance of winning. The odds on him winning are 1.70.

So “b” is going to equal 0.70. That’s the multiple of our stake we can win with a wager at 1.70. “p” is going to equal 0.60, because we’ve given Murray a 60% chance of winning. “q” is going to equal 0.40. The complete formula would then look like this.

((0.70 x 0.60) – 0.40) / 0.70 = 0.29

As you can see, “f” is 0.29. We then multiply this by 100, to give us a percentage. In this case, it’s 2.9%. That’s the percentage of our bankroll that we should stake. So if our bankroll was $1,000, we’d stake $29 on this wager.

Please Note:

When applying the Kelly Criterion formula, a negative figure will sometimes be returned. If this happens, you shouldn’t place the wager. This negative figure is effectively telling you that there is no positive value.



In reality, using the Kelly Criterion isn’t that complicated at all. Once you’ve learned the formula, and how to apply it, it’s a simple case of doing the necessary calculations each time you place a wager. The main advantage of this plan is that it takes both the size of your bankroll and the theoretical value of a wager into consideration, which helps to optimize the size of your stakes. You’ll be betting higher amounts when there’s lots of value, and smaller amounts when there’s less value. This SHOULD lead to optimal results in the long run.

The main disadvantage is that the Kelly Criterion relies entirely on accuracy when assessing probabilities. If you don’t calculate the chances of your wagers winning adequately enough, then this staking plan becomes almost useless. You’ll end up betting significantly more, or significantly less, than you technically should.

It’s difficult for us to actively recommend the Kelly Criterion as a staking plan because of this. We wouldn’t go as far as saying you SHOULDN’T use it, but you should certainly proceed with caution if you do decide to try it out.

One thing we will say is that the Kelly Criterion is definitely not a staking plan for beginners or recreational bettors. As we’ve already stated, fixed staking plans are a far better option for inexperienced bettors and those who bet primarily for fun.

Final Points

The main purpose of this article is to make you aware of just how important bankroll management is. So we’ll stress this point one more time. You MUST give some consideration to bankroll management when betting on sports, regardless of whether you bet seriously or just for entertainment. If you don’t, you risk losing money that you can’t afford. Or losing money more quickly than you’d like. Not to mention, you’ll also completely diminish your chances of making a long-term profit.

Of course, understanding the importance of bankroll management is only the first step. That’s why we’ve also explained HOW to manage a bankroll. We’ve taught you what you need to do, and now it’s up to you to follow our advice. This is easier said than done, because good bankroll management requires strong discipline.

Using a proper staking plan should make it easier to remain disciplined, but it’s still important to make absolutely sure that you stick to the relevant rules ALL the time. There’s little benefit in using a staking plan 90% of the time, and then losing all self-control the other 10% of the time. That can still do a lot of damage to your bankroll. If you ever feel like you’re losing control, stop betting immediately and take a break. If you have doubts about whether or not you’ll be able to stay in control in the future, then you might have to give up betting altogether.

If you can stick to a staking plan and practice good bankroll management, betting on sports will be a much more enjoyable experience. You’ll increase your chances of making long-term profits too. By only ever staking a percentage of the money you have to bet with, you should be able to ride out any bad losing streaks. You’ll also avoid making reckless wagers to chase losses, and resist the temptation to increase stakes when things are going well.

Put simply, good bankroll management is not just “important.” It’s VITAL. Please try to remember that at all times.

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