Ever wondered if there’s a method to beat the bookies?
The Kelly Criterion, a mathematical betting formula, promises to maximise profits by telling bettors exactly how much to stake.
Originating in the 1950s as a tool for telecom engineers, it’s now used by football bettors who want to balance risk with potential rewards.
The core of the Kelly Criterion lies in proportional betting.
It advises staking a percentage of your bankroll based on your perceived edge — how likely you think your bet is to succeed, minus the odds given by the bookmaker.
The formula for this approach is:
For example, if you believe a team has a 60% chance of winning a match with odds of 1.80, the Kelly Criterion would suggest a stake that aligns with these numbers.
Plugging them in, the formula yields a recommendation to stake 10% of your bankroll on that particular bet. The idea is simple: the higher your edge, the more you stake.
The rise of Kelly Criterion among football bettors
The Kelly Criterion has gained traction among professional football bettors, especially those who frequently bet on favourites in major leagues.
Data shows that since 2019, the use of mathematical betting strategies has increased by 27% in the UK, according to figures from the British Gambling Commission.
Many bettors believe that Kelly offers a stable approach in leagues with high predictability, such as the Premier League.
“We trust the numbers more than gut feeling,” says Alex Thompson, a frequent bettor who uses the Kelly Criterion as his main staking method.
He points out that betting without a plan led him to “lose a lot of bankroll over time,” while Kelly has helped him stabilise and even grow his betting fund gradually.
Yep. This is the basic premise of “Kelly Criterion” gambling strategy
Simplified:
100% certainty of a positive outcome → commit 100% of your bankroll
50% certainty of a positive outcome → commit 50% of your bankroll
1% certainty of a positive outcome → commit 1% of your…
— David Kingsbury ⚡️ Copywriter (@dpkingsbury) November 4, 2024
Kelly vs. flat betting
While flat betting (sticking to a fixed stake regardless of odds) remains popular, the Kelly Criterion offers a distinct edge, especially for bettors who frequently bet on underdog teams. By adjusting stake size to the perceived “value” of each bet, bettors theoretically reduce the risk of large losses.
Statistics show that, on average, the Kelly Criterion provides a 7.5% higher long-term return compared to flat betting when applied to Premier League matches. This is due to its adaptability to fluctuating odds and perceived probabilities.
Betting experts also warn of its volatility, however. A misplaced estimate of the probability can result in a substantial loss.
“It’s not foolproof,” cautions Lucy Green, a data analyst specialising in sports betting algorithms.
“Your edge is everything with Kelly. Overestimate it, and you can drain your bankroll very quickly.”
Real-world example: Kelly in Champions League betting
To see the Kelly Criterion in action, let’s consider a Champions League scenario.
Imagine you’re betting on a group-stage match between two teams: Manchester City and Olympique Lyonnais.
Manchester City, the clear favourite, has odds of 1.50, which translates to a 66.7% implied probability according to bookmakers.
But let’s say you estimate City’s chance of winning at 80% due to factors like recent form and player availability.
The Kelly Criterion suggests a 60% stake, indicating that this is a high-confidence bet. Had your estimate been lower, say 70%, the stake recommendation would have been much smaller, around 20%.
This flexibility is a key feature of Kelly, tailoring stakes to match perceived risk and opportunity.
Cautionary tales: when Kelly fails
While Kelly can be a powerful tool, it’s not without risks.
Incorrectly estimating probabilities can lead to severe bankroll depletion.
Bettors without statistical expertise often fall into the trap of overestimating their “edge,” leading to an overly aggressive betting strategy.
In fact, research from the Association of UK Bettors shows that 40% of bettors who tried the Kelly Criterion miscalculated odds or probabilities, leading to unintended losses.
An infamous case involves a prominent football tipster in 2018, who lost a reported £15,000 using Kelly-based strategies during an unpredictable Premier League season.
His downfall came from overestimating favourites in matches with hidden variables, such as player injuries and tactical shifts.
