A JavaScript Kelly Criterion calculator that suggests a bet size when making a sports bet when given the odds of the bet and the probabilities of the outcomes.
Using the Kelly Criterion is known to minimize the risk of ruin, yet still maximize a bet size when given the probable odds of outcomes. Use of the Criterion is known to be better than guessing or making arbitrary bet sizes.
For an even money bet, the Kelly criterion computes the wager size percentage by multiplying the percent chance to win by two, then subtracting one. So for a 70% chance to win (or .7 probability), doubling .7 equals 1.4, from which you subtract 1, leaving .4 as your optimal wager size -- 40% of available funds (bankroll).
For other bets with varying payouts, a different calculation needs to be made, and is computed as follows:
ƒ* = (bp - q) / b
where:
The probability of winning is unknown in sportsbetting.
The probability of losing is always 1 - p, as it is just the probability remaining of the system (if you don't win, you lose)
To find the net odds, subtract the decimal odds of the sports bet by 1 (usually American football spread bets are 1.91 decimal odds, so be would be .91 (1.91 - 1))
Overall, the Kelly Criterion is widely considered a smart and disciplined staking strategy, as opposed to simply betting to level stakes. One potential downside is that you’ll need to accurately assess the percentage chance of a selection winning, so it may be wise to experiment with ‘paper’ bets to see how you get on.
Another option is to use ‘Fractional Kelly’, which means only betting a certain fraction of a recommended bet. Although it’s a more cautious method, it reduces the impact of possibly over-estimating your edge and depleting your bankroll.