QUESTION OF THE DAY: Today's question comes from Jason in a recent e-mail.

Nolan,

I have a question to ask you. I was reading a post yesterday you left on the forum regarding how much one should wager on a single game. You said roughly 3-5% of your bankroll. I like the philosophy of playing 5% on a game. The more in your account the more you wager....still at 5%.
My question though is this. What does one wager on a BEST BET? For example, I have $500 in my account. If I wager 5% a game which is $25....what do you suggest I wager on a "best bet?" How much?

 

MY REPLY: Excellent question. I have been asked to specify what I mean by a "Best Bet" and define how this translates into a wager of presumably larger proportions.

First, my money management techniques are not for everyone. Also note that I usually handicap NBA games 24-hours in advance and post my thoughts to the board well before the next game starts. I do this so that readers will have extra time to read the reports and can respond and make their own adjustments -- if they wish. However, there are times when I will lay off of a game because of a late line movement or I pick up additional information the following day which leads me to change the wager. I do not always follow my own plays and sometimes I make additional plays. This is not meant to imply I do not have confidence in my analysis. It is usually on the mark. But, this format simply does not allow me to make a "last second" recommendation when I see that a total has moved, or I learn that a key player is out with an injury. We have to understand our limitations with this kind of a forum and acknowledge that these write-ups are meant as a guidance tool only and are not always the definitive word on a game (the same can be said for any prognosticating entity -- whether it be sports handicapping, personal investing, or whatever). Once again, I defer to the message board on MadJacks which is an excellent resource for late-breaking news. I have come to rely on the analysis of a great many on that forum to tailor my own plays at the last minute. I stress once again that WE are a TEAM on this site. I am happy to lend everyone my own work and experience in sports handicapping. But I am also quick to point out that I am open to others who may have a better feel for certain games and situations.

That said, I do all of my betting through XXXXXXX (I have edited myself in the interest of confidentiality). I am fortunate to have access to many lines and I can almost always get the most advantageous price that is available in XXXXXXXX. I usually call in my bets from the East Coast at about 5:00 pm daily.

When I hear about an unexpected or unexplained line movement, the first thing I do is ask WHY the line has moved. I have some pretty good resources so usually my contact on the other end can immediately fill me in on what's going on. But often, the public moves the line one way or the other by the sheer volume of money. Case in point was the total in the NBA All-Star game last week which went up from 256.5 to 258.5, although anyone with half a brain knew the UNDER was the only play with any value. When I am puzzled about a line or total, I do a "call back" and then I go and read everything I can on-line to get the latest breaking news. Then, if I determine the line has moved and given me extra value, I may INCREASE the size of the wager.

Conversely, if I am prepared to bet a game and was expecting to get 5 points, then I see the line is only +3 I may decrease the wager. It depends on how strong I liked the game.

Therefore, you can see that it is difficult to communicate the size of your wagers with the strength of your convictions. It depends on what happens, what you learn, in addition to what you already know, and the final number. One thing I always do -- if I am UNCERTAIN about what to do on a game, I always pass. Always. There are games every night of the week. There's no reason to start shooting money on games just for the sake of action. That's what makes the NCAA dangerous for many bettors.

As far as the size of your wager, I pointed out that the closer you are to being at the margins, the higher percentage of your BR you can put on a single game. I'll use an example from poker, because it's the best one I can think of. Let's say you are a solid player. But, you only have a BR of $1,000 dollars. There is a $1-2 game, a $5-10 game, a $10-20 game, and a $20-40 game from which to choose. Which game should you select?

Let's assume all the games are equal as far as talent (to make things simple). And, let's say you have a theoretical 8 percent edge over your opponents (in sports-betting parlance, this means you can pick ~56 percent winners). The standard BR management theorist would advise that you play in the smallest game, since that way you can almost be guaranteed to grind out a small profit, with minimal exposure to going bust. In other words, you are almost assured of grinding out $5 an hour in the game (a rough estimate), AND you will not go broke. Sounds like good advice. But what about the prospect of playing much higher -- say $20-40? Why not just sit in the game and if you catch a hand or two, you might double your money (note: for those who do not know, $1,000 would last about 4-5 hands played to conclusion in a standard $20-40 game). The problem is, this kind of thinking is wrong. The reason is -- you are exposing yourself to too great a fluctuation of variance. Even if you are a very good player and have an edge in the game, it is certainly conceivable that you could lose 4-5 hands in a row (and end up broke). It happens all the time. You have sacrificed your edge, for the sake of expediency. Big mistake.

The correct answer to the question for most people is to play in either the $5-10 game or the $10-20 game, because you stand a reasonable chance to make money if you play well (in relation to opponents) and while you could go bust, the chances are probably unlikely (especially at the $5-10 level, which would be almost impossible). This way, if you have a winning session, you will enable yourself to increase your BR by a significant percentage. However (and this point is key!), as your BR grows, you should be LESS LIKELY to assume those same risks.

To sum up, if you have a $20,000 BR it is NOT advisable to bet $1000 per game (or 5 percent of your BR). This is because if you go on a bad run, you stand to lose a much greater amount of money than someone that suffers the same fate who is playing at the margins with a much smaller bankroll. For a $20,000 BR, a standard wager should be no more than ~2-3 percent of BR (more conservative advisers recommend as little as 1 percent, but I think that's unrealistic). However, if you have only a $1,000 BR you can assume much more risk (say as much as 5 percent per play) because the same bad run will only expose you to a $1,000 loss.

Of course, when I talk about the risks of going bust, I am assuming you have additional resources for money (a job or some kind of income). If you are really down to your last dollar and have no other money coming in, you probably should not be gambling at all, and if you do -- you should be in the equivalent of the $1-2 poker game. We are talking basic survival here.

In the case of a BEST BET, I would say the $20,000 BR bettor who is wagering $500 per play (which is standard for a BR of that size) might consider making a wager of $750 instead. I generally increase my BEST BET wagers by 50 percent over the regular bet. Occasionally, when the play is really strong and I am convinced of the game, I might play it for double a bet, but no higher. Case in point was this year's Super Bowl when I had a couple of $500 bets (which is a bit higher than my usual $300 wager per play).

If you have a BR of $500, I recommend wagers in the $20 to $30 range. If you like a play strongly, play it for $30. If you think it's worth a small play, just bet it for $20. If you can hit 57 percent over the course of the year, based on 200 plays, you will end up doubling your money. That means next season you will be betting $50 a game. Then, the next you are at $100 per game and you are on your way to a successful career in sports handicapping.