Betting enthusiasts are constantly testing a variety of strategies in order to improve the chances of success. Currently, there are a number of game systems that work well and can help gamblers save money.
The Kelly Criterion is one of these strategies. It is able to keep the player afloat even if there is a long run of unsuccessful bets. However, it is not so easy to be in the black constantly, according to this system. So let’s analyze the essence of the Kelly strategy in sports arbitrage, learn the formula for bet calculation, and discuss the rules of using this approach.
The Kelly Criterion in betting is a method of wise bankroll management, when the amount of each subsequent bet is determined in relation to the probability of success of a particular outcome. That is to say, the gambler estimates the chances of the event's success on his own, and then calculates the optimum bet amount using a special formula. This strategy is an improved version of the “flat” strategy.
The Kelly Criterion works on the principle that a bettor has to distribute some amount of his bankroll for each next bet, based on its value. The amount of the bet is calculated using three criteria: the total size of the funds, the bookmaker's quotes, and the probability of the event's success (estimated by the player). In doing so, the calculated success probability of the selected event should be higher than the bookmaker claims it to be.
As per the Kelly criterion, the bet amount is calculated according to the specific formula.
Bid amount = ((Odds х Probability* – 1) / (Odds - 1)) х Bankroll
* Probability – Gambler’s assessment of a bet success rate.
The formula above looks pretty simple, but it is very difficult to apply it in fact. It’s not an easy task to find an overstated event, and moreover, it is necessary to define the risks wisely. Even experienced gamblers struggle to cope with the last task. But you can use the BetBurger scanner and find valuebets without any problems. Kelly's strategy is considered to be marginally profitable, and to make it a good source of revenue, you should almost be a math genius.
A clear understanding of Kelly's strategy requires a review of this method using a real case example. To check it out, let's take a real match of the 2020/2021 Champions League Final between Manchester City and Chelsea. In this match, the bookmakers are leaning towards the Citizens, obviously underestimating the chances of the Pensioners. Such a situation would work in our favor.
According to the quotes, the bookmaker estimates the probability that Chelsea won’t lose (X2) during the regular time at 51.8% (odd 1.93). We estimated this outcome at 58%, and that means the value of the bet. For simplicity, our bankroll will be $100. Now let's put the gathered data in the formula:
Bid amount = ((1.93 х 0.58 – 1) / (1.93 – 1)) х 100 = $12,83
You can clearly see that when Chelsea won’t lose, and with a $100 bankroll, the bet amount corresponds to $12,83 (12,83% of the bankroll).
This method is not recommended for newbies since its success is determined by the ability to calculate the correct probability of the event outcome. Even experienced players face difficulties when making use of this technique. Kelly's strategy looks like a competition between a gambler and a bookmaker in the accuracy of determining the success rate of a particular event.
For more information see the article:How to Make Predictions and Analyze Sports Events
Usually, the strategy is used when there is a deal with valuebets. That is when the bookmaker made a mistake in calculating the probability of a certain outcome and set wrong quotes. However, you can expect to succeed by Kelly bet only if you follow the proven rules. These tips have been developed by betting experts based on years of experience: