Kelly Criterion

The Kelly criterion is a mathematical formula for sizing bets when you have an edge. It maximizes the long-run geometric growth rate of your bankroll.

Formula: f* = (bp - q) / b

Where: - f* = fraction of bankroll to wager - b = decimal odds - 1 (your profit if you win, per unit risked) - p = true probability of winning - q = 1 - p (probability of losing)

Example: 60% chance to win at +200 (decimal 3.0). b=2, p=0.6, q=0.4. f* = (2 × 0.6 - 0.4) / 2 = 0.8 / 2 = 0.4 → bet 40% of bankroll.

Full Kelly produces high variance — bankrolls can swing 30-50% in normal play. Most professionals use: - Quarter Kelly (f*/4): much smaller swings, slower growth, more sustainable - Half Kelly (f*/2): a common middle ground

Kelly assumes you accurately know your probability p, which in practice you never do. If your p estimate is off by even a little, Kelly can recommend bet sizes that risk severe drawdown. Most pros err toward LESS than Kelly suggests, not more.

SportsBookISH's bet tracker doesn't currently auto-recommend bet sizes, but the Skill Score includes Sharpe ratio (return per unit volatility) which is a Kelly-friendly metric.