Kelly Criterion Sports Betting: How to Size Your Bets
The Kelly Criterion is a proven formula for calculating exactly how much of your bankroll to wager on each bet. Here's how it works and how to use it.
By
Eric Pauly
Feb 2, 2026
7 min read
Why Bet Sizing Matters More Than You Think
Most sports bettors spend all their energy finding good bets and almost no time figuring out how much to wager. That's a problem. Even if you have a legitimate edge, betting too much can wipe out your bankroll during a cold streak, and betting too little leaves money on the table. The Kelly Criterion solves this by giving you a mathematically optimal bet size based on your edge and the odds you're getting.
Developed in 1956, the Kelly Criterion has become the gold standard for bet sizing among sharp bettors, professional gamblers, and even Wall Street traders. In this guide, you'll learn the Kelly formula, how to apply it step by step, why most serious bettors use a fractional version, and when the formula works best. If you've been flat-betting or guessing your wager amounts, this is the upgrade your unit-based staking strategy needs.
article Summary
The Kelly Criterion is a mathematical formula that tells you how much to bet based on the size of your edge. Using fractional Kelly (typically 25-50%) protects your bankroll from variance while still maximizing long-term growth.
What Is the Kelly Criterion?
The Origin of the Formula
The Kelly Criterion was developed by John L. Kelly Jr. in 1956 while working at Bell Labs. Kelly originally designed the formula to optimize signal noise in long-distance telephone lines, but gamblers and investors quickly realized it had a much broader application: determining the optimal amount to wager when you have an edge. Since then, it's been adopted by everyone from blackjack card counters to hedge fund managers to sports bettors.
The Kelly Formula Explained
The formula itself is straightforward:
f* = (bp - q) / b
Where:
f* = the fraction of your bankroll to wager
b = the decimal odds minus 1 (so +200 in American odds = 3.00 decimal = b of 2)
p = your estimated probability of winning
q = the probability of losing (1 - p)
A Quick Example
Say you're looking at a bet priced at +150 (decimal odds of 2.50), and you believe the true probability of winning is 50%. Here's how you'd plug it in:
b = 2.50 - 1 = 1.50
p = 0.50
q = 0.50
f* = (1.50 x 0.50 - 0.50) / 1.50
f* = (0.75 - 0.50) / 1.50
f* = 0.25 / 1.50
f* = 0.167, or 16.7% of your bankroll
In this case, Kelly says you should bet 16.7% of your bankroll. That's a large wager, which is why most bettors use a fractional approach (more on that in Section 3). But the formula gives you a starting point rooted in math, not gut feel.
How to Use the Kelly Criterion for Sports Betting
Step 1: Estimate Your Win Probability
This is the hardest part. You need an honest assessment of how likely a bet is to win, not what you hope will happen. You can build this estimate from your own models, historical data, or by using EV betting tools that calculate implied probabilities and compare them to true odds. Tools like OddsJam and Outlier surface +EV bets along with estimated edges, which gives you a probability estimate to work with.
Step 2: Convert Odds to Decimal
If your sportsbook shows American odds, convert them to decimal first. For positive American odds: decimal = (American / 100) + 1. So +110 becomes 2.10. For negative odds: decimal = (100 / |American|) + 1. So -150 becomes 1.667. Then subtract 1 to get your "b" value for the formula.
Step 3: Plug Into the Formula and Calculate
Let's walk through a realistic example. You think a team has a 55% chance to win and the odds are +110 (decimal 2.10):
b = 2.10 - 1 = 1.10
p = 0.55
q = 0.45
f* = (1.10 x 0.55 - 0.45) / 1.10
f* = (0.605 - 0.45) / 1.10
f* = 0.155 / 1.10
f* = 0.141, or 14.1% of your bankroll
Step 4: Size Your Bet
If your bankroll is $2,000, full Kelly says to bet $282. That's a significant portion of your bankroll on a single bet. Most bettors would (rightly) feel uncomfortable with that size, which is why fractional Kelly exists. The key takeaway is that Kelly scales your bet size proportionally to your edge: bigger edge means bigger bet, smaller edge means smaller bet. No edge means don't bet at all. If Kelly returns zero or negative, the formula is telling you there's no value.
Why Most Bettors Use Fractional Kelly
The Problem With Full Kelly
Full Kelly is mathematically optimal for maximizing long-term bankroll growth, but it assumes one critical thing: that your probability estimates are perfectly accurate. In sports betting, they never are. If you overestimate your edge even slightly, full Kelly will have you betting too much, which can lead to brutal drawdowns. A string of losses at full Kelly sizing can cut your bankroll in half or worse before you recover.
The variance with full Kelly is extreme. Even when you have a real edge, you'll experience significant swings. Research shows that full Kelly betting can result in 50%+ drawdowns during normal variance, which is psychologically and financially difficult to endure.
Half-Kelly: The Sweet Spot
Half-Kelly, wagering exactly half of what the full Kelly formula recommends, is the most common approach among serious bettors. You sacrifice some long-term growth rate (about 25% less than full Kelly) but dramatically reduce your variance and drawdown risk. If full Kelly says 14%, half-Kelly says 7%. That's much more manageable for your bankroll and your stress levels.
Quarter-Kelly is another popular option, especially for bettors who are less confident in their probability estimates or who are working with smaller bankrolls. The principle is the same: take the full Kelly output and divide by four. You'll grow slower, but you'll also survive longer through inevitable losing streaks.
Matching Your Confidence Level
The fraction you choose should reflect how confident you are in your edge estimates. If you're using a proven model with years of backtesting data, half-Kelly might be appropriate. If you're estimating probabilities based on limited information, quarter-Kelly or even one-fifth Kelly is smarter. The point is to build in a margin of safety so that imperfect estimates don't blow up your bankroll. Understanding expected value is critical to making Kelly work in practice.
When Kelly Works and When It Doesn't
Kelly Works When You Have a Real Edge
The Kelly Criterion is powerful when you can genuinely estimate probabilities better than the market. This is most realistic when you're using positive EV betting tools that identify mispriced lines, when you've built a model that has demonstrated a track record, or when you're betting into soft markets where the books haven't sharpened their lines yet. In these cases, Kelly gives you a disciplined framework for sizing your bets proportionally to your advantage.
When Kelly Doesn't Work
Kelly breaks down in several common scenarios:
When you're guessing: If your probability estimate is a gut feeling rather than data-driven, the formula's output is meaningless. Garbage in, garbage out.
When bets are correlated: Kelly assumes each bet is independent. If you're betting multiple games on the same slate and the outcomes are correlated (like multiple overs in a high-total game environment), you need to adjust your total exposure downward.
When you can't assess probability accurately: Some markets, like live betting or niche props, are harder to model. If you can't estimate probability with reasonable confidence, Kelly isn't the right framework.
Common Mistakes to Avoid
The biggest Kelly mistake is overestimating your edge. If you think you have a 5% edge but really have a 2% edge, full Kelly will have you betting roughly 2.5x what you should. Over hundreds of bets, that compounds into serious bankroll damage. Other common mistakes include not adjusting for multiple simultaneous bets (your total Kelly exposure should be capped), applying full Kelly when your estimates are imprecise, and forgetting to recalculate as your bankroll changes. Kelly is a dynamic formula. Your bet size should change as your bankroll grows or shrinks.
Tools That Help With Bet Sizing and Bankroll Management
You don't need to calculate Kelly by hand. Several sports betting tools help you estimate your edge, which feeds directly into the Kelly formula. OddsJam and Outlier are two of the best EV betting tools. They identify +EV bets and show you the estimated edge percentage, which gives you the probability inputs you need for Kelly calculations.
On the tracking side, Pikkit and Action Network PRO are strong bet tracking apps that help you monitor your bankroll, track bet sizing over time, and measure whether your staking strategy is actually working. If you're using Kelly, tracking your results is essential so you can verify that your edge estimates are accurate and adjust your fraction accordingly.
Using Kelly alongside these tools creates a disciplined staking system: EV tools identify the bets, Kelly tells you how much to wager, and tracking tools measure the results. That's how professional bettors approach bankroll management, and it's the same framework available to anyone willing to put in the work. For a deeper look at the best sports betting tools, check out our full roundup.
Final Thoughts
The Kelly Criterion is the most respected bet-sizing formula in sports betting for a reason. It's rooted in math, it scales with your edge, and it protects your bankroll from reckless overexposure. But it only works if you have a genuine edge and honest probability estimates. Without those, Kelly is just a formula producing false confidence.
Use fractional Kelly (half-Kelly is a great starting point), be conservative with your probability estimates, and pair the formula with EV tools and bet tracking to keep yourself accountable. Bet sizing might not be the most exciting part of sports betting, but it's one of the most important.
Kelly Criterion Sports Betting FAQ
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