Kelly Criterion Calculator
The Kelly Criterion finds the optimal bet size that maximizes long-term bankroll growth. Enter your bankroll, your estimated true win probability, and the sportsbook\'s odds. The calculator returns both the full Kelly stake and the recommended half-Kelly (lower variance).
The Kelly formula
f* = (bp − q) / b
Where:
- f* = fraction of bankroll to wager
- b = decimal odds minus 1 (the net payout per $1 staked)
- p = your estimated true win probability
- q = your estimated loss probability (1 − p)
Why half-Kelly?
Full Kelly maximizes expected log-growth but produces high variance. A 20-bet losing streak at full Kelly can cut a bankroll by 50%+. Half-Kelly retains roughly 75% of long-term growth at one-quarter the variance — a strictly superior tradeoff for most bettors.
Common Kelly mistakes
- Overestimating your edge — most bettors think they have a 5-10% edge when they actually have 0-2%. Be conservative with probability estimates.
- Using Kelly without an edge — Kelly returns 0% (or negative) when there\'s no edge. Don\'t bet just because you\'re using the formula.
- Ignoring bankroll cap rules — some sharps cap Kelly at 5% of bankroll regardless of perceived edge, to protect against probability misestimation.
Kelly Criterion FAQ
What is the Kelly Criterion?
The Kelly Criterion is a mathematical formula for optimal bet sizing that maximizes the long-term growth rate of a bankroll. It accounts for both the perceived edge and the odds offered.
What is half-Kelly?
Half-Kelly means wagering 50% of the full Kelly amount. It reduces variance significantly while sacrificing only a small fraction of long-term growth. Most professional bettors use half-Kelly or even quarter-Kelly to smooth bankroll swings.
When does Kelly recommend NOT to bet?
Kelly returns 0% or a negative recommendation when the bet has no edge — when your estimated win probability is at or below the sportsbook's implied probability after vig. A 0% or negative Kelly is the formula telling you to pass.
Why is Kelly important?
Without proper bet sizing, even profitable bettors go bankrupt during normal variance. Kelly ensures bet sizes match your edge — bigger edges justify bigger bets, smaller edges justify smaller bets.