How to Use the Kelly Criterion Calculator
A Kelly Criterion sports betting calculator can be used to manage your sports betting bankroll and determine optimal bet sizing.
For obvious reasons, if your sports betting bankroll is, say, €5,000, you should not stake it all on one bet, regardless of how great you think the bet is. This is just common sense! Even the best bets lose sometimes, and you don't want your risk of ruin to be too high. You don't want to go broke on one bet.
But what's the optimal bet size? Should you bet 5% of your bankroll or 2.5% on each wager? That's what a Kelly Criterion calculator tells you. It's a mathematical betting formula that calculates the amount you should stake when there is a discrepancy between the given odds and the "fair" odds.
Of course, you should only place wagers when the given odds are superior to the "fair" odds. You don't want to place a bet at 2.00 odds when fair is 2.03. This would be a negative expected value sports bet, and the Kelly Criterion would tell you to stake €0.
Kelly Calculator Inputs
To use a Kelly Criterion calculator, you need to enter:
- Kelly Multiplier: Typically 0.25 (quarter Kelly) or 0.5 (half Kelly) to reduce variance
- Odds: The decimal odds given by the sportsbook
- Fair Win Probability: The true win probability based on no-vig calculations
- Bankroll: Your current sports betting bankroll
The Kelly calculator will automatically determine your optimal bet size. This mathematical formula was designed to help you maximize profit while minimizing risk of ruin.
As a general rule of thumb, your total sports betting bankroll should be an amount of money that you are comfortable losing. Most sports bettors start with a bankroll of €5,000 to €25,000.
Finding Fair Win Probability
You can determine "fair" win probability using the current market odds from the sharpest sportsbook in the world—Pinnacle!
Simply enter Pinnacle's market odds into a no-vig calculator to determine fair win probability.
Example: Imagine Pinnacle has Liverpool's moneyline odds listed at 2.00 and their opponent also at 2.00. Both teams have the same odds. Thus, the "fair" win probability for Liverpool would be 50%.
Kelly Criterion Formula
Kelly % = (bp - q) / b
Where:
- b = decimal odds - 1 (the profit multiple)
- p = fair win probability (as decimal, e.g., 0.60 for 60%)
- q = fair loss probability (1 - p)
Simplified for decimal odds: Kelly % = (p × decimal odds - 1) / (decimal odds - 1)
Why Use Fractional Kelly?
Full Kelly (1.0 multiplier) maximizes long-term growth but creates massive variance. A single bad streak can wipe out significant portions of your bankroll.
Fractional Kelly advantages:
- Quarter Kelly (0.25): 25% of full Kelly stake, much smoother growth, recommended for most bettors
- Half Kelly (0.5): 50% of full Kelly, balanced growth and variance
- Full Kelly (1.0): Maximum growth, maximum variance, only for very risk-tolerant bettors
Most professionals use quarter to half Kelly to avoid the extreme swings of full Kelly while still growing bankroll optimally.
FairOdds Terminal and Kelly Betting
This calculator shows you HOW to calculate optimal bet sizing, but FairOdds Terminal makes it easy by:
- Automatically calculating fair probabilities from Pinnacle
- Showing your edge (EV%) on every bet
- Displaying +EV opportunities where Kelly recommends betting
- Helping you track bankroll and performance
Start your free trial to find +EV bets with built-in edge calculations.
Kelly Criterion Calculator FAQ
What is the Kelly Criterion?
The Kelly Criterion is a mathematical formula that determines optimal bet sizing to maximize long-term profit while minimizing risk of ruin. It calculates what percentage of your bankroll to wager based on your edge and the odds offered.
How is the Kelly Criterion calculated?
Kelly % = (probability × decimal odds - 1) / (decimal odds - 1). This gives the fraction of bankroll to wager. Most bettors use fractional Kelly (25-50%) to reduce variance while still growing bankroll optimally.
Who created the Kelly Criterion?
John Kelly created the Kelly Criterion in 1956 for long-distance telephone signal optimization at Bell Labs. He realized it could be applied to investing and gambling, and it became the gold standard for bankroll management.
Should I use full Kelly or fractional Kelly?
Most professional bettors use fractional Kelly (quarter Kelly = 25% or half Kelly = 50%) to reduce variance. Full Kelly maximizes growth but creates large swings. Fractional Kelly provides smoother growth with less volatility.
What is a Kelly multiplier?
Kelly multiplier (0.25, 0.5, etc.) determines what fraction of the full Kelly stake you'll use. 0.25 = quarter Kelly (25% of full Kelly stake), 0.5 = half Kelly (50%). Lower multipliers reduce variance but also slow bankroll growth.
What bankroll should I start with for Kelly betting?
Start with an amount you're comfortable losing—typically €5,000-€25,000 for serious bettors. Kelly Criterion works best with adequate bankroll to handle variance. Smaller bankrolls should use more conservative (lower) Kelly multipliers.