Kelly Criterion — Optimal Bet Sizing
Calculate the mathematically optimal bet size based on your edge and bankroll. Used by professional bettors and investors.
What Is the Kelly Criterion?
The Kelly Criterion is a mathematical formula that determines the optimal bet size to maximize long-term bankroll growth. The formula: f = (bp - q) / b, where f = fraction of bankroll to bet, b = decimal odds minus 1, p = probability of winning, q = probability of losing (1-p). It was developed by John Kelly at Bell Labs in 1956 and is used by professional gamblers, hedge fund managers, and investors.
Why Half Kelly Is Better Than Full Kelly
Full Kelly maximizes long-term growth rate but creates enormous variance — bankroll swings of 50-80% are common. Half Kelly sacrifices only 25% of the growth rate but reduces variance by 50%. Most professional bettors use half Kelly or quarter Kelly. The mathematical growth is still excellent while the ride is much smoother.
When Kelly Says Do Not Bet
If the Kelly percentage is zero or negative, you have no edge. The formula is telling you that at these odds with your estimated probability, betting any amount has negative expected value. This is the most valuable output of the calculator — it prevents you from making -EV bets.
The single biggest mistake in sports betting is bet sizing, not pick selection. A bettor who picks 55% winners but uses proper Kelly sizing will outperform a bettor who picks 58% winners but bets randomly. Bankroll management is the only sustainable edge.
