Kelly Criterion Calculator

The Kelly Criterion is a mathematical formula used to determine the optimal bet size to maximize long-term bankroll growth while minimizing risk. It helps bettors avoid overbetting and bankruptcy.

To use the Kelly Criterion, calculate your edge (expected value) in a bet and use the formula: Bet Size % = (Chances / Odds) * 100. This gives the percentage of your bankroll to wager on that bet.

The Kelly Criterion is effective for maximizing long-term returns, but it assumes accurate probability estimation. In real betting, miscalculations can lead to suboptimal results, so some bettors use a fractional Kelly approach.

The basic Kelly Criterion formula in Excel is: =((Decimal Odds * Probability - 1) / (Decimal Odds - 1)). This formula helps calculate the optimal bet size as a fraction of your bankroll.

The Kelly Criterion aims to maximize long-term profits, while flat betting offers more consistent risk management. Kelly is better for skilled bettors who can accurately assess probabilities, while flat betting is safer for casual bettors.

Suppose a bettor finds a bet with 2.00 (even) odds and believes there is a 55% chance of winning. Using the Kelly formula: (2.00 * 0.55 - 1) / (2.00 - 1) = 10%. The bettor should wager 10% of their bankroll.