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The Kelly Criterion in Football Betting That Every Newbie Knows

The Kelly Criterion is considered an extremely important formula in financial investment or betting. Simply put, the Kelly Criterion in betting is used by bettors to significantly improve investment performance over time. In the following article, tips win will provide detailed information about this unique betting formula. Stay tuned for more.


A Brief Overview of the Kelly Criterion

The Kelly Criterion was created by John L. Kelly as a method to account for the odds of a betting event in order to determine the level of risk for each specific bet. Currently, there are several variants of the Kelly Criterion, and the simplest formula among them is: (B x P - Q) / B. Where:

  • B is the decimal odds offered.

  • P is the actual probability.

Q = 1 - P.

  • For example, let's apply this formula to a match between teams A and B.

The probability of team A winning is 58.5%, with decimal odds of 1.71.

The probability of team B winning is 27.4%, with decimal odds of 3.65.

Finally, the probability of team A drawing with team B is 30.8%, with decimal odds of 3.25.

To have team A win about 65% of the time, according to the Kelly Criterion: P = 0.65; B = 1.71 - 1 = 0.71; Q = 1 - 0.65 = 0.35. Hence, we have: (0.71 x 0.65 - 0.35) / 0.71 = 15.7%.

What the Kelly Criterion suggests for betting on this match, based on the odds provided and an actual probability assessment of 0.65, is that one should bet 15.7% of their bankroll. For some, this percentage may seem too high, but in reality, it is intended for those who understand this formula. Sometimes, the suggested percentage might reach 20% or 30%.

>> Explore additional insights into home win prediction and enhancing your betting strategies.

The History of the Kelly Criterion

John Kelly, who once worked for AT&T's Bell Labs, originally developed the Kelly Criterion to assist AT&T with issues related to long-distance telephone signal noise. This method was introduced under the title "A New Interpretation of Information Rate" in 1956.

However, the gambling community became aware of this formula and recognized its potential in football betting. The formula allows players to maximize the growth of their bankroll over a long period. That's why many people today still use it as a common money management system for both betting and investing.

An Overview of the Entire Kelly Criterion in Betting

In 1956, the Kelly Criterion was developed to ensure optimal growth of the betting fund. As mentioned above, this formula was initially invented to assist the AT&T Company. Later, it was widely developed and spread to other fields as an effective financial management method.

This formula requires careful calculation, meticulousness, and patience for long-term use to be effective. Over many changes, the current form of the Kelly Criterion in football betting is: Betting amount = ((Odds x % Chance of Winning) - 1) / (Odds - 1) x 100.

Advantages and Disadvantages of Using the Kelly Criterion in Betting

Advantages and Disadvantages of Using the Kelly Criterion in Betting

Below are the advantages and disadvantages of the Kelly Criterion. Specifically:


Advantages

Each formula has its own advantages. What are the advantages of the Kelly Criterion in betting that make it so interesting to many? Let's find out right away.

  • Effective capital management before and during betting.

  • The amount of money bet is carefully and reasonably calculated based on the loss ratio and the bookmaker's odds.

  • Minimizes risks and helps players win more money.

  • Gives a better overview of the match before deciding which team to bet on.

  • Easily analyze statistical data and come up with a suitable strategy for oneself.

Disadvantages

Despite many mentioned advantages, the Kelly Criterion in betting also has some disadvantages that need to be addressed:

  • The accuracy of money management through this formula cannot reach 100%.

  • Players need to determine the winning ratio for the match they want to bet on.

Instructions on How to Apply the Kelly Criterion in Betting

This capital management formula is used in different types of games and at each bookmaker. For example, in a match between teams C and D with the following information:

Odds: 1.93.

  • At this point, the player's Kelly Criterion in football betting would be: Betting ratio = ((1.93 - 60%) - 1) / (1.93 - 1)) x 100 = 16.99%.

Note: If these ratios are negative, it's likely because the winning odds of the match are not too high. In such a case, there are two options:

  • Bet on the opposing team.

  • Stop betting on that match.

Conclusion

Above are the latest information Wintips betinum wants to share with you about the Kelly Criterion in betting. We hope that through this formula, everyone will have a clearer view of its history and how to calculate the Kelly Criterion most accurately to improve their own winning rate.

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