Many sports bettors have a chance at a penny doubled per day but never learn optimal bet sizing. Most continue to flat bet because they need to cash out to pay their living expenses or whatever else. But if you started with only $500 and every week increased it 5%, it would take only 3 years to turn $500 into $1,000,000.
Is the above example realistic? Perhaps not and perhaps so, but; how close to $1,000,000 do you suppose you would get if you spent 3 years flat betting 1% ($5) per game, never increasing your stake.
So if you ever come across with the proposal: “I will pay you a penny for the first day you work and I will double it every day for a month” Before you answer, make sure you do the math, the penny doubled every day for 30 day is $10,737,418.23!
This is the scenario we are referring to, with some winning sports bettors when they manage their Bet Sizing.
First let’s make sure we all understand certain terms: expected value: (+EV / -EV)
It is how much a player expects to profit per wager on average.
If we were to make an infant number of even money (risk 1 to win 1) bets on the result of a coin flip, this is neutral expected value. This is because we’re getting 50% odds and the chances of winning are 50%.
Let’s instead say that on a coin flip we’re getting +150 odds (risk 1.5 to win 1). This an extra 0.5 per win, and we win half the time. In this case we have positive expected value (+EV) of +0.25. If we had odds -150 (risk 1.5 to win 1) we’d have negative expected value (-EV) of -0.25. Note that the EV equation is: (win probability * what you’ll be paid if you win) – (loss probability * amount staked)=EV
This article is only for the benefit of those who make primarily +EV bets and never knowingly make –EV bets. This is because as an investment strategy the optimal stake on –EV bets is zero.
For those new to betting for profit understand that there are many ways to find +EV bets. It is a lot of work, often is not fun, but the rewards can be well worth it. For those whom already know how to make +EV bets, this is where understanding expected growth is important.
Understanding Expected Growth
Let’s say that we find a 12% advantage on a line that pays American odds +49,800,000,000 (risk $1 to win $498 million). The expected value on $10,000 bet is still $1,200. However, if making this bet once per day, the average American male would need to die and be reborn over 17,952 times to be expected to have averaged just a single win. So 12% +EV but you are not going to win (period). The expected value is +$1200 but the expected bankroll growth is -$1200. This extreme example was just to prove the point.