The Kelly Criterion

The Kelly Criterion


An interesting and generally safe betting strategy, which appeared in the middle of the 20th century, The Kelly Criterion was developed to effectively trade on the financial exchange market. The main advantage of this tactic is that it allows you not to lose your bankroll for a long time, and with the right approach it will also help you make excellent profit.

Kelly’s strategy is the most accurate prediction of the possibility of the occurrence of an event, as well as determining the percentage of each bet based on the amount of funds on your football betting account.


To determine the size of your bet within this tactic, use the following formula:

(Your forecast for a football event * odd – 1) / (odd – 1).

For clarity, we give an example:

You have 2000€ in your bankroll.

The odd of the football event is 1.90.

Your prediction for the match has 65% (0.65) probability in your opinion.

We add the current figures in the formula:

(0.65 * 1.90 – 1) / (1.90 – 1) = 0.26.

So, you need to bet 2000€ * 0.26 = 520€.

As you managed to notice, the less finances in your account, the lower the rates. And the most interesting is that if you determine the occurrence of an event more accurately than a bookmaker’s office by at least 10%(value betting), then the probability of losing at a coefficient of rates 2.0 ten times in a row will be only 0.034%.

It is important to remember that you can not make quick money using this method of betting: if a favorable development of events occurs on average, one bet will increase your bankroll by only 5%. If you decide to apply this strategy in practice, you should pay attention to three main points:

1.Predefined limits

You should clearly know to what specific time to place bets in the limits of this tactic. That means, think in advance upon the achievement of what amount of profit you intend to withdraw the won money, continuing to bet based only on the initial bank.

This step is not only economically beneficial, but also positively affects the psychological aspect, as money from virtual will turn into real money, and this will undoubtedly increase your motivation.

2.Ability to make correct predictions

This ability is getting better and better over time, and to be more precise: with the accumulation of experience. To become a good bettor who perfectly defines the outcomes of sporting events, you should constantly engage in detailed analysis of matches, athletes, learn information on this topic provided by professionals, in general, always be aware of developments in the field of the chosen sporting direction.

It is best to work with such bookmakers that offer the most overvalued odds. Another important element of success is the belief that the event you are betting on will happen with a probability higher than 50%.

3.The amount of money in your betting account

In order to use Kelly’s strategy in practice, as well as to achieve a certain amount of profit, it will take approximately the amount that will allow you to make 10 to 16 bets. After this, just in case, adjust yourself to the fact that the worst thing that can happen is that you lose money from your bankroll, but it will not happen immediately, besides, the losses will not affect the entire bank.

The above tactic is very popular among players who linked their destiny with the world of betting. But there are people who consider this strategy rather risky. This view is based on the fact that in order to achieve success within the framework of Kelly’s strategy, it is necessary to be able to make an assessment of the outcome of events.

We would like to note that when calculating the size of the rates according to the Kelly formula, the sum is high, so it’s best to divide the result by two.

In addition to the described method of Kelly’s strategy, there is another option: use the formula to calculate the proportion of rates for two events. For example, you want to put 2% on the first event, and on the second event – 4% of the current bank, which is equal to 2000€. Then, if the total sum of these two bets is 200€, we put 2/6 = 66€ on the first outcome, and on the second – 4/6 = 134€.