This lesson applies to gamblers of all kinds. Whether playing casino games or betting sports, bad bankroll management will sink you every time.
Games such as blackjack along with sports betting are roughly 50/50 propositions. Why is it then that we lose money far more often than we win? Sports bettors who consistently turn profits are very rare.
The truth is that most bettors lose.
The main source of these losses is not bad picks but bad management of their available gambling funds, or their bankroll. I will share the top three reasons why most bettors lose.
Reason #1: The House’s Pockets Are Deeper Than Yours
This should be obvious. When you go to the casino or bet with a sportsbook, they have more money than you. This is important because it means that they can withstand a much longer losing streak than your bankroll can.
If you have $100 to bet with, it will not take too many consecutive losses to deplete all of your funds. Even if you have a winning streak on Monday, you could soon find yourself nearing broke at the end of the week if your luck turns. This is especially true if you get greedy and lose a large bet or two.
Because you are always much closer to going broke than the house is, they can constantly throw rewards and bonuses your way, prompting you to make larger and larger bets until you inevitably zero out your balance.
Reason #2: You Bet Too Much of Your Bankroll
Assume you still have $100. How should you go about dividing up your bets? You could risk everything and bet the whole $100 on one game for a maximum payout. I think most would agree that this is probably not smart as you MUST bet correctly or you will lose everything.
Maybe try a $50 bet? Well, this will at least allow you two incorrect picks before you are broke, but that is still very risky. $10 is more like it. If you are planning to bet on a lot of games, such as being an active bettor during the MLB season, you really need to bet a small percentage of your bankroll on each game to buffer losing streaks.
At $10 a pop, you could withstand an initial losing streak of nine games and still be kicking. I know that losing nine bets in a row seems unlikely, but what about a stretch in which you win ten bets and lose twenty?
A 33% rough patch over 30 games is not uncommon. If you bet $10 a game, however, it will totally drain your $100 bankroll. Many experts advise only betting 5% of your bankroll on each game. Base your percentage off of the volume of games you plan to bet. A very high volume may call for an even lower percentage.
Betting this small sounds very conservative – and it is. But do you know what is even more conservative – not being able to bet because you blew all of your money recklessly. Increase your profits by steadily increasing your bankroll. As your bankroll grows over time, your 5% bets will become larger and more profitable.
Reason #3: You Have a Floor But No Ceiling
How many times have you been up $300 at the casino only to lose it all and go home down the $100 you came in with? Do you know why this happens? It is because you have a floor but no ceiling.
Your floor is the extent of your bankroll. If you have $200 in your account, $200 is your floor. Once you are down $200, you are done. You are out of money so you have to stop playing. Our floor is forced on us. You cannot go any lower.
The problem is that most bettors have no ceiling. They do not know when to stop in the other direction. This is because unlike the floor, the ceiling is not a hard line. You must set your own limit and adhere to it.
If you tell yourself at the beginning of the night that your goal is to win $100, you need to stop once you reach $100. If you do not stop yourself once you reach a certain point, you will inevitably continue to place bets chasing greater and greater profits until you are back in the hole.
Set yourself a ceiling. Be it $20, $100, or even $15,000, stop yourself and withdraw that money before you lose it all. Learn to set hard ceilings for yourself and you will be amazed how you are winning more often.