So now that you’ve figured out what games to bet, the next big decision to make before you make your wager official is how much do I bet on this particular event. There are lots of differing views on money management, and at its core is whether to “flat-bet” or to wager “units”, making each play a different amount.
UNITS
I prescribe to the “units” wagering theory, solely because it’s the best way to utilize your capital. All wagers do not carry the same edge. Then why would you wager the same amount on all of them?
We’ve talked about different ways to filter your games into groupings. These groupings each have a different level of probability for success. If one group has a success rate of 55% while another’s is 59%, it’s most efficient to deploy more capital to the group with a higher success rate!
This seems so simple, and doing anything else seems so illogical, yet there are proponents of flat-betting who will chastise you for betting different amounts on different games. Of course, you can’t just throw around different amounts for different games with no reasoning behind each play. But having a structured money management system that allows for the proper allocation of capital to each level of probability is the most efficient way to manage your money.
The Numbers
So let’s talk numbers…If you bet all the events in a filtered group of games that had a 56% probability of success the same amount (at -110 odds), you would profit 7.6 units over 100 plays. This comes from gaining 56 units on your wins, subtracting 44 units from your losses, and paying a vig of 4.4 units.
Now compare that against a filtered group with a success rate of 60% that yields 16 units over 100 plays (60-40-4=16). That’s more than double your profit at the end of the sample size. So if the first group of plays were allocated “x” % of your bankroll (lets say 5 units), then the second group should be allocated “2x” % of your bankroll (10 units). Don’t get hung up on how many units you are playing, but focus on the relationship between the size of each wager to each other. This is what determines the efficiency in your use of capital.
Now if you thought that I just picked those probabilities randomly, then think again! Everyone should know that breakeven (at -110 odds) is 52.4%. There is no point in playing anything with an edge of less than 55% as your profit margin is so slim. So my smallest wager will need to have an edge of 56% for me to even consider it as a play, and in my research and history I’ve found that my filtered plays achieve that type of edge.
On the other hand, it is foolish to think that you can find a grouping of plays, over a large enough sample size, that will consistently beat 60%. The linesmakers are not that inept in their job to make a wrong line on an event more than 60% of the time. So my wagers fall into 3 different sizes: smallest for plays with a 56% edge, largest for plays with a 60% edge, and then medium for plays that fall in between (let’s call it a 58% edge).
So as stated before, if a 60% edge is worth twice as much as a 56% edge, then the unit size for that wager should be twice as much as well. Looking at a play in between those edges, a 58% edge will give you a profit of 11.8 units. This works out to ~50% more than the profit from a 56% wager (7.6x.50 = 3.8 + 7.6 = 11.4). So you’re medium play wager size should reflect that same edge. The difference between a 58% edge and a 60% edge is 4.2 units (16-11.8 = 4.2). This 4.2 increase in profit equals a ~33% increase, and thus the wager size for your large play should be about 33% more than your medium play.
So we need a sequence of values where the third value is twice the first, one-third more than the second, while the second value has to be more than the first by 50%. Confused yet..?? It’s actually easier than you think: 2/3/4 fits this sequence perfectly!! As such, I use these values as my wager sizes for my small, medium, are large plays.
Just determine based on your bankroll how much a unit should be worth, knowing that your smallest wager will be 2 units. For example, if your bankroll is $1000 and you want your smallest wager to be 1% of your total, then you would allocate $100 for your small play. Since the small play is 2 units, you would be playing at a rate of $50/unit, and now your medium play would be $150 and your large play $200. If you base your plays on dollar amount and not a percentage and wanted your smallest play to be $250, then you would be playing at a rate of $125/unit, and your plays would then be $250/$375/$500.
Ridiculous Unit Sizes
We’ve all seen gamblers, and specifically touts, make wagers that are 5 units or even 10 units, while other plays are only 1 unit (although with touts it’s usually 10/50/100 unit plays as they want to make it look like they’ve won so much money, but it’s all relative anyway). Let’s examine how ludicrous it is to have a money management system where some plays are five and ten times as much as others.
For the sake of this example, let’s look at a minimum wager of one unit with an edge of 55% as opposed to the 56% that I use. I would hope that no one is making a wager with an edge any less than this, or that a tout would be charging you for a play that would make you such a small profit. A play with this edge would result in a net of +5.5 units after 100 plays. So a 5 unit play would result in +27.5 units, which is five times more than your one unit play.
In order to achieve that result, you would need a play with an edge of roughly 66% (66-34=32 -3.4=28.6). For a play worth 10 units, you would need an edge which would result in a profit of 55 units, or roughly a 79% edge (79-21=58 -2.1=55.9).
What kind of betting system gives you a consistent edge of 66%, let alone 79%..?? There has yet to be one developed in real time, and if there was to be one created in the future, the linesmakers would eventually adjust to it anyway, and the edge would eventually be lost, or at least lessened.
But why would anyone that has an edge on games of 66% or 79% even bother wasting their time with plays that only carry an edge of 55% is the real question!!! It’s because those huge plays don’t carry that type of edge, and is a brutal mistake in money management (although it’s probably a great marketing ploy…hahaha).
Based on the examples above and by using basic math and probability, you can see why the “weighted units” style of wagering is much more advantageous than just basic flat betting. Now the next time someone tells you that flat betting is the best way to bet sports, you can tell them they’re wrong, and just pull out this article and explain to them the most efficient way to maximize profits. They might even agree with you!
MAXIMIZE YOUR EDGE
