Money management is the number one reason why most gamblers lose with their baseball betting. It is just as, if not more important, than how many of your MLB picks win. You might be following the best baseball handicappers in the world, but without proper money management you will end up with less money than you started with by season’s end.
You must start with a bankroll, or the amount of money you have set aside for gambling. This amount needs to be what you can comfortably lose without affecting your lifestyle. Start with the mentality that betting is for entertainment purposes. It’s exciting to bet and win. It makes the games more interesting. A good motto is hope to win, but expect to lose.
You’ll want to keep your bets somewhat consistent. You don’t want to bet a little on some and then a ton on others. You need to keep your bet size relatively small compared to your bankroll. Otherwise one big bet or a series of losses can take you out of the game. Allow for failure and don’t over-extend.
Now the last paragraph might seem a little depressing, but it’s important to stress not losing the money you need for life’s necessities. Even me, who makes a large portion of my income from gambling, needs to take the attitude that the first priority is to protect the bankroll. Let’s take a look at some different strategies used and which I recommend.
Bad Idea: Covering Losses
There are a couple of different systems gamblers use to try to cover or make up for their losses. One is called Labouchere. With Labouchere you use a series of numbers to decide the size of your next bet. The sum of the two outside numbers represent your next bet amount. If you win you cross out the two outside numbers and use the shorter line. If you lose you add the amount just wagered to the end of the line. The value of the bets are the sum of the first and last numbers in the line. Here’s an example:
Game 1: 1-1-1-1
Your first bet is 2 units (1+1). If you win you cross those out (x-1-1-x) and still bet 2 units. If you lose you add 2 to the end of the line and it becomes 1-1-1-1-2 so your next wager would be 3 units. If you lose those one you add the 3 to the end and get 1-1-1-1-2-3 to get to 4 units. This continues on as you chase your losses betting more and more. An extremely long losing streak can jump those units up fairly high and cost you a lot of money.
Another option is the Martingale system. It’s similar. If you bet 1 unit on the first game and lose try to make up that loss with another 1 unit bet. If you lose you cover your losses and go 2 units. If you lose that you jump to 4 units. If you lose that one it’s 8, then 16, then 32 and you can see how quickly your bankroll can be toast with a moderate losing streak.
OK Idea: Flat Units
There are two methods to flat unit betting. The straight flat amount you bet on each game and the star ratings where you bet the same amount depending on the star.
Flat bets means that your wager amounts do not change. You bet the same amount over and over again with your gambling. If your amount is $10 it stays $10 forever. I like this only because it allows you to stay consistent with all of your wagers and not risk too much on any single game.
Another strategy is the star ratings. Even some of our free MLB picks on this site come with star ratings of different strength values. What that means is that if you have a rating system of 3-5* you would bet 3% of your bankroll on 3* plays and 5% on the 5* plays. Amateur bettors fall into trouble here because they start valuing their games stronger if they are losing just so they can risk more money in order to earn back their losses.
Best Idea: Kelly Criterion
Professional gamblers use Kelly to calculate their bet sizes. The reason amateurs might run into trouble is the same as with star ratings. You might start becoming over-confident in your bets and risk more and more money.
The basic idea behind Kelly is that your bet size changes depending on the percentage chance you feel the game has to win and the size of your bankroll. Albion Research has a nice little calculator you can use to calculate your bet size. My advice is to be conservative in your estimates.
Best Idea: Shop Around
No matter what you decide to do, you have to make sure you get the best odds possible. This is as simple as opening up multiple accounts and comparing the numbers before you place any bets. You’ll save money on losses, and win more on your winners.
It’s never a good idea to gamble because you need the money. Or, if it’s to fill some void in your life. Only gamble if you can afford to lose. It’s just like with investing in the stock market. You aren’t investing money that could be used to feed your family and you aren’t going to gamble those same dollars either.
Gambling becomes a problem when a person can’t control themselves. People have lost homes, relationships, and ruined their lives due to gambling problems. If you think you are having any issues then we encourage you to seek out help. There is the National Council on Problem Gambling Helpline or Gamblers Anonymous if you need some assistance.