How Kelly works
Kelly outputs the fraction of your bankroll to bet. The formula is edge divided by odds: (bp - q) / b, where b is the decimal payout minus one, p is your win probability and q is 1 minus p. A real edge produces a positive fraction; no edge produces zero, which is Kelly's way of saying do not bet.
A worked example
Suppose a bet pays even money (b = 1) and you believe you win 55 percent of the time. Kelly says stake (1 x 0.55 - 0.45) / 1 = 0.10, or 10 percent of your bankroll. Because full Kelly is aggressive and your probability estimate is never exact, most bettors use half or quarter Kelly to cut swings.
Why bettors use fractional Kelly
Full Kelly maximizes growth in theory but produces stomach-churning swings and punishes overconfident estimates hard. Half Kelly keeps most of the growth with far less volatility. In practice, disciplined bettors combine a Kelly-style sizing with a simple unit cap so no single play, however confident, can put too much of the bankroll at risk.
In the Wise Guy tools
Kelly stake
A way to size each bet from its edge and price: bigger edge, bigger bet. We default to 1/4 Kelly because full Kelly swings hard.
Example: $1,000 bankroll, a 3% edge at +100: full Kelly is $30, 1/4 Kelly is about $7.50.
How our tools use it: A staking rule that sizes each bet from the estimated edge and the fee-net price. Full Kelly swings hard, so the default is 1/4 Kelly (1/8, 1/2 and Full are options). Stakes are per bet and bets on the same game are not combined. A price that is not actionable gets no stake.
Stake modes
How each bet is sized when the results are added up: the same size every time, or the board's own suggested stake.
Example: Flat 1 unit bets $100 every time on a $10,000 bankroll; 1/4 Kelly bets more on bigger edges.
How our tools use it: Flat 1 unit: every bet the same size. 1/4 Kelly: each bet at the board's own suggested stake when it was flagged (a quarter of the Kelly stake, sized on the starting bankroll, no compounding; 1 unit = 1% of bankroll). Your bankroll: the 1/4 Kelly result in dollars on the bankroll saved in your tools settings.
Frequently asked questions
Is the Kelly Criterion better than flat betting?
It grows a bankroll faster when your edge estimates are accurate, but it swings harder. Many bettors use fractional Kelly or a unit system to balance growth and safety.
What does Kelly say to bet with no edge?
Zero. If a bet has no positive expected value, the Kelly fraction is zero or negative, meaning you should not place it.
Your next step
- 1Learn itKelly Criterion (this page)
- 2Apply itHow to win at sports betting →
- 3Run itBankroll Management →
- 4Master itDay 11: The 1-10 unit bankroll system →
Related terms
- Unit
- A unit is a standard bet size expressed as a fixed share of your bankroll, most often 1 percent.
- Expected Value (+EV)
- Expected value, or EV, is the average amount a bet would win or lose if you placed it many times over.
- Closing Line Value (CLV)
- Closing line value, or CLV, measures whether the price you got on a bet was better than the closing line, the final odds right before the event starts.
- ROI (Return on Investment)
- ROI in sports betting, short for return on investment, is the profit you made divided by the amount you risked, shown as a percentage.
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