Fantasy Sports Betting Bankroll Management: Kelly Criterion Calculator (9/28/10)
Daily fantasy sports contests at sites such as FantasySportsLive.com are really starting to take off, but this isn’t your normal fantasy game. The contests are daily and they are for real money, which makes them a combination of fantasy sports and traditional sports betting. Even though the fantasy games are legal, it’s still gambling and you have to treat it as such. In order to survive for an entire season, bankroll management is an absolutely necessary skill. Today I’m posting an important gambling tool: The Kelly Criterion Calculator.
The Kelly Criterion Calculator doesn’t tell you what to bet on, it tells you how much to bet on the selections that you like. It’s simply a bankroll management tool. There are three parts to the calculator: 1) the size of your current bankroll, 2) your estimated winning percentage and 3) the payout odds (commissions).
Just to give you an idea of how it works, I’m going to show what my strategy is for the upcoming NBA season. The size of my starting bankroll is $4,000.00, my estimated winning percentage is 60% and the payout odds are 11 to 9. Plugging those numbers into the calculator, the optimum aggressive bet size is $440.00. I’m not hugely aggressive on fantasy sports and prefer a half-Kelly bet, which in this case would be $220.00. That’s roughly eight $25 bets, four on FantasySportsLive.com and four on Fanduel.com each night.
While that seems like a very small bet for that size bankroll, following the calculator will keep you in the game for the long run, which will enable you to realize your edge over a large sample size. It’s a marathon, not a sprint.
The Kelly Criterion does have some dangers and the Calculator should simply be the the first step in determining your bet sizes. Later this week, I’ll post a few other ways to control variance in your fantasy sports betting bankroll and other things you might want to consider when sizing your daily bets. Good luck.