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Just how much
is enough bankroll?

Nov 18, 2003 3:53 AM

The proper bank-to-bet ratio is seldom employed by the vast majority of gamblers. The most flagrant is that the size of the bets are too large to be appropriately supported by capitalization (bankroll).

This is playing on "short dough" and adds another dimension of "luck" to the games as if just "selection" wasn’t risky enough. Sometimes, a guy will have "luck" and get by on short capitalization for a spurt but most often not.

Setting profit goals is fine but too often they are unÂí­realistic due to greed and Âí­ignorance. As in a lot of businesses, undercapitalization is their death knell. And as such, their survival depends on luck and not sound economics.

No bankroll is really too small, it all depends on what you ask it to do. The only time a small bankroll incurs problems is when the bets cannot be made because of low limits or the bets are too large, putting the bankroll at greater risk ”” a higher probability of going broke.

Football bettors have an added burden because all of the bets are ganged up on a weekend. So even properly-sized bets can jeopardize a bankroll if there are too many to get down at once (simultaneous bets). Ah, the dilemma.

People with short funds are bound to overextend themselves, basically because they "need the money." They end up being the biggest contributors to the bookies’ profits. They spend a lot of time between games trying to hustle up enough stake for another round of bets. A sad story with only one inevitable conclusion.

Money management is a science not an art. There are very definitive formulas that can provide you the answers for proper play. That’s where all risks are reduced to almost zilch if your selection proficiency averages a positive expectancy. That’s about a minimum of 54 percent winners on 10/11 laydowns. If it’s less than that, then all the money manipulations in the world won’t help you. Best to refrain from betting until you can tighten up your handicapping techniques.

Too many, however, shun this advice and "crave action," depending, on the large part, for a stroke of luck. The idea of successful gambling is to try to play in such a way where dependence on luck is no factor.

Once a gambler’s records indicate that his selections have a positive expectancy (above "break even") then all the rest becomes cut-and-dried mathematics.

He can determine his Kelly advantage and that percentage will determine the maximum size of his individual bets to achieve optimal return on his bankroll investment.

For instance, if you determine that historically your game advantage is five percent, then it stands to reason that your average bankroll should be at least 20 times your individual wager.

If you are not satisfied with the amount of money you will be earning, then don’t make the common mistake of raising your bet size. To achieve profit goals, you raise the size of your bankroll instead.

If the most prudent bankroll to satisfy your profit expectations is beyond your present means, then you should take a hiatus and accumulate proper funding. An alternative would be to settle for a-less-than-desired profit goal by using advantage bet sizes and earn your way into sufficient capitalization. There are no shortcuts.

Oh yes, even the best of handicapping and selection methods will have their slumps or losing streaks. These are inevitable but good money management is programmed to anticipate it and gives you a chance to swim out. A short bankroll or oversized bets would ruin all your goal aspirations.

It’s really nothing new in almost all endeavors. But sometimes it takes re-emphasizing to insure one’s solvency during bad times.

Protect thy bankroll, the ultimate goal.

(For many years, Huey Mahl was a columnist for GamingToday. Although he has passed on, his gambling insights remain timely even today.)