Money Management
I said last year
that this would be the most important column for
those that want to win and I say it again this
year because I think it is. I apologize to those
that have read this material before, but good
money management is what separates the pros from
novice bettors. Money management theories and
systems abound but I have yet to see any proof
that any of them really work. What I do know is
there are a lot of bad money management strategies
to avoid and that is what I will cover today. Our
book managers actually asked me not to write this
column last year!
Here is the key
point I want you to understand – Poor
money management generates more losses for players
than bad handicapping. Even the worst
bettors seldom lose more than 55% of their picks.
The easiest way to explain is to show a few
examples. Take a look at the following four
scenarios and hopefully you won’t recognize any
of these habits as yours.
Scenario A
– Raising your bet amounts. Alan is a
$100 player. He typically plays half a dozen or so
games a week and is a dedicated handicapper. The
first week he makes 5 wagers of $110 to win $100
and goes 4-1. For the week, he has made a profit
of $290 (4 wins of $100 and 1 loss of $110), a
great week by any standard. He now thinks his
handicapping skills are so sharp that he can beat
the house on any week and now raises his plays to
$200. In the second week he makes 6 bets of $220
to win $200 and goes 2-4. For the week he has lost
$480 (2 wins of $200 and 4 losses of $220). So
overall, Alan has lost $190 despite going 6-5
overall (54.5%). If he had simply played $110 on
all 11 games he would have made $50 in profit. Raising
the size of your plays after a short-term winning
period will benefit the House greatly if and when
things even out.
Scenario B
– Lowering your bet amounts. Bill is
also a $100 player but has a slightly smaller
bankroll than Alan. He makes 6 plays of $110 and
goes 2-4 for a loss of $240 (2 wins of $100 and 4
losses of $110). His bankroll is now too small to
be able to play $100 a game so in the second week
he only makes 5 plays of $55 to win $50 each. This
week he wins 4 of the 5 and makes $145 (4 wins of
$50 and 1 loss of $55). He now has the same
overall winning record as Alan (6-5) but is down
$95 anyway. Lowering the size of your
plays after a short-term losing period or not
having enough funds to make your plays will also
benefit the books when your turn to win comes.
Scenario C
– Risking your balance. Charlie likes
to take big risks for big rewards. He posts up
$110 and risks it all on a single game Saturday
night, which he wins. His balance is now $210 and
he risks it all on a Sunday 1pm game, which he
also wins to bring his balance to just over $400.
Feeling lucky, he puts the whole amount on a 4pm
game and wins again to get his balance to an
incredible $765 (and change) in less than a day.
Then, he decides to go for the big win and risks
the whole amount again on the Sunday night game,
which he loses. Charlie has now lost $110 despite
going 3-1. Wagering $110 for each of the four
games would have yielded a profit of $190. Remember
books have a 50/50 chance of wiping you out when
you put all your action on any one game and those
odds will catch up with you eventually.
Scenario D
– Chasing your losses. David has a
bankroll of $1000. He wagers $110 on a game and
loses. He is frustrated at losing the money and
wants to win it back so he wagers $121 (to win
$110) on a second game and loses as well. He is
now down $231 and is really frustrated. Thinking
he can’t lose 3 in a row, he wagers $254.10 (to
win $231) and loses yet again. He has now lost
$485.10 and even a win with his remaining balance
of $514.90 won’t get him back to even but he
puts it all in play on another game hoping to get
it close (it would be a win of $468.09). He loses
the fourth game and has busted out. Losing
streaks will happen to every player every year no
matter how good they are and players that chase
losses will not last for long.
Many books/sites
that discuss money management will tell you to
only wager 2-5% of your bankroll on any one play.
I cannot say what the magic number is and I
certainly do not have any magic formulas for
picking winners or telling you how much to bet.
However, it is very clear to me after years and
years of watching some players win consistently
and others lose consistently that these are the
four worst traps to avoid. Keep your bets to
reasonable, affordable and consistent amounts and
your bankroll will last a long time. Even more
importantly, if you can pick more than 52.4%
winners, you will come out ahead of the book in
the long run and that is the only time frame that
matters!
Good money
management will not make you a winner, that still
has to come from choosing the right teams, but it
sure will help your bankroll last. I had a lot of
very nice emails from players who took this advice
last season. Some said they won money over the
course of the season for the first time but most
just said it was the first time they had a plan,
and that their money lasted way longer last year
than in years prior.
Good luck with your wagers!
BoDog
Rob Gillespie
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