- Enhancing Betting Strategies
- Understanding the importance of betting methods in gambling
- Knowing the most common betting strategies
- Identifying the most effective betting methods
- Why Betting Strategies Matter
Ed Thorp, a professional blackjack player and author, is renowned as a master card counter. Many would argue his success was transformative for Las Vegas casinos, leading to the introduction of multi-deck games and stronger anti-counting measures.
Betting Strategies
Calculating the appropriate bet size to achieve consistent profits is a critical aspect of a gambling strategy.
Thorp attributes much of his success to a bet-sizing formula created by mathematician John Kelly. “For your earnings, the game strategy’s impact… accounts for about a third to a quarter. The betting strategy makes up around two-thirds or three-quarters of your results.”
So, what makes a practical strategy in sports betting? Inspired by Alex Bellos’ Alex’s Adventures in Numberland, we tested five betting strategies over 500 simulated bets to gauge their profitability.
The chart below shows the profit from 500 simulated bets with a 55% win rate. Each method started with an initial stake of $100 (except for an “all-in” method which started at $1,000). Beginning bankroll was $1,000 for each, and simulations continued through all 500 bets or until funds were depleted.
As shown, some betting strategies yield higher profits but can also increase the risk of loss.
The Five Betting Strategies
Which description do you think matches each strategy?
Strategy 1: All-In
Bet your entire bankroll each time. The advantage is that you could win a substantial amount very quickly. The downside? A single loss would mean the end of your betting journey.
Strategy 2: Fixed Stake
Bet the same amount each time, regardless of wins. In this example, the stake is $100. With a 55% win rate and even odds, this strategy minimizes the chance of losing your bankroll. However, profits will grow slowly and steadily.
Strategy 3: Martingale
After each loss, double your bet to recover previous losses. This method can grow profits faster than a fixed stake (since you double to recover losses). However, consecutive losses may require massive stakes to recoup prior bets.
Strategy 4: Fibonacci
Increase your bet according to the Fibonacci sequence, aiming to recoup previous losses gradually. Like the Martingale, this approach can build profit but also risks escalating stakes after a losing streak, albeit at a slower rate.
Strategy 5: Proportional Betting
Bet a percentage of your bankroll based on your perceived edge. In this example, we use the Kelly Criterion to calculate proportional bets. Here, your stake equals your edge divided by the odds. With a 10% edge and even odds, the stake is 10% of your bankroll, or $100. If you win, the next bet increases proportionally, compounding growth.
Which is the Best Strategy?
Answers:
- A. All-In
- B. Martingale
- C. Fixed Stake
- D. Proportional Betting
- E. Fibonacci
As indicated, proportional betting often stands out as the superior strategy. If your last $100 remains, you’d bet $10, and gradually less with each bet, extending your gameplay more effectively than fixed stakes, where the final $100 would be the last wager.
The “all-in” method offers the potential to win as much in one round as other strategies would in several rounds, but only if the initial bet is successful; otherwise, you’re immediately out.
To win consistently with a 55% win rate over 1,000 bets is unlikely without an edge (like Thorp’s card counting). But hypothetically, at a 55% win rate, you’d amass astronomical winnings over time if you managed not to bust early on.
Both Fibonacci and Martingale systems perform well initially but lead to steep losses if consecutive losses occur. In the simulation, 11 consecutive losses depleted both strategies, leaving the Martingale bettor needing $403,000 to recover, far beyond their $6,300 bankroll, while Fibonacci would require $33,500, which is also unsustainable.
The fixed-stake approach is safer but grows funds at a slower rate. By Bet 83, this method increased funds to $3,400, then dipped to around $2,300—avoiding total loss but remaining modest in growth.
Proportional betting is also affected by losing streaks, dropping from $7,359 to $2,286 during an 11-bet loss—a level lower than fixed stakes. Yet, by Bet 500, proportional betting netted $18,275 compared to the fixed stake’s $6,400.
It’s crucial to remember that these simulations assume an edge. Without it, all strategies yield different outcomes.
Supporting Your Betting Skills
This simulation illustrates how different strategies yield vastly different outcomes, whether they result in total loss or a profit of $18,275 by the 500th bet. Picking the right betting system is key.
There’s no “perfect” system. While the Kelly Criterion performed well here, other systems might suit different types of betting. Finding the method that best suits your sports betting style requires research and simulations.
Additionally, the Kelly Criterion only works if you know your edge. Misestimating your edge leads to poor results regardless of the strategy used. Exploring our other gambling resources can deepen your understanding of betting formulas and strategies.