KELLY CRITERION IN BETTING

The bet size = (bookmaker's coefficient * actual probability - 1) / (bookmaker's coefficient - 1) * total bankroll size. This is an expanded formula with a description, which is also presented in this form - R = (K * V - 1) / (K - 1) * B. You can use any option that is most convenient, but the essence of the Kelly criterion basically does not change. It is important to remember that in any case, you will need to calculate everything not in percentages, but in money. This is very convenient and anyone can handle the calculations without having special knowledge in higher mathematics.

Let's give a small, simple and clear example. If the bankroll is 1000 dollars, and the initial odds for the bet are equated to two (2), then the indicator is 50%. The player believes that the real probability is around 55%, so he includes the data in the formula and gets the following: (2 * 0.55-1) / (2-1) * 1000 = 100 dollars. Thus, a bet of $100 should be made.

ADDITIONAL EXAMPLE FOR CLARITY:

In the final of the Australian Open, Novak Djokovic plays against Rafael Nadal. The first has a coefficient of 1.6, and the second respectively has 2.5. If translated into a percentage ratio, then the probability of Nadal's victory will be about 40%. The better reviewed the personal statistics and decided that the chance of winning the Spanish tennis player is still 50%. The amount = (2.5 * 0.5-1) / (2.5-1) * 1000 = 166 dollars. There are formulas, according to which you can really calculate and the percentage ratio of the bet. This is not convenient for every better, and additionally you will have to calculate the bet size in monetary equivalent.

But now there is especially no need to worry, because there are many high-quality calculators capable of calculating the Kelly criterion only after entering the necessary data. You can do everything yourself using Microsoft Excel capabilities.

DETERMINING UNDERVALUED OUTCOMES

To calculate undervalued outcomes, a bettor must use value betting. In simple terms, these are situations where a bookmaker's odds significantly differ from the real probability. Let's consider an example. The bettor has chosen the match "Barcelona" - "PSG" for betting and believes that the Spanish club can win with a 60% probability. The bookmaker gives odds of 1.8, which is 55%. Consequently, if the player is correct, then the bookmaker has made an error in the presented line. Calculating percentages is very straightforward — you need to divide 100 by the presented odds. Quotations are created in reverse: 100 is divided by the percentage of probability.

In an individual order, a bettor can assess the chances, and it's relatively easy. A detailed analysis based on statistics will need to be conducted. The indicator will not be accurate, and there is no need for it to be. Note that no one gets it right the first time, and one needs to go through a challenging path of trial and error to approximate chances.

DETERMINING UNDERVALUED OUTCOMES

To calculate undervalued outcomes, a bettor must use value betting. In simple terms, these are situations where a bookmaker's odds significantly differ from the real probability. Let's consider an example. The bettor has chosen the match "Barcelona" - "PSG" for betting and believes that the Spanish club can win with a 60% probability. The bookmaker gives odds of 1.8, which is 55%. Consequently, if the player is correct, then the bookmaker has made an error in the presented line. Calculating percentages is very straightforward — you need to divide 100 by the presented odds. Quotations are created in reverse: 100 is divided by the percentage of probability.

In an individual order, a bettor can assess the chances, and it's relatively easy. A detailed analysis based on statistics will need to be conducted. The indicator will not be accurate, and there is no need for it to be. Note that no one gets it right the first time, and one needs to go through a challenging path of trial and error to approximate chances.

Common errors by bookmakers in forming the line:

• incorrect filling of coefficients on the website;

• improperly conducted analysis;

• artificially created situation where huge sums are placed on one event to decrease the odds, which is colloquially called "load".

Eventually, quotes can significantly differ from the real ones. Sometimes it benefits the bookmaker, but if professionals are betting, the situation is the opposite. To find value bets, you can use excellent scanners, choosing one or several from the ranking located on our site. We thoroughly analyze various projects, after which we can confidently offer the most reliable solutions.

CRITICISM OF THE KELLY CRITERION

Regardless of how verified and reliable a strategy might be, there is a lot of criticism. The most common one is the failure to account for market volatility and the impact of dispersion on results. In simple terms, every bettor can win and increase profit by making small bets on high odds if the advantage, in the player's opinion, is significant. This is possible, but in the case of quality analysis. Conversely, when bets are placed on small odds, and the bet amounts are large, a single loss can deprive a bettor of a significant part of the bank.