Staking Strategies: Flat Betting vs Kelly Criterion vs Percentage

Why Staking Strategy Matters

Finding +EV bets is only half the battle. How much you bet on each opportunity determines whether you profit or go broke.

The harsh truth: Many bettors with genuine edge blow up their bankroll through poor stake sizing. Meanwhile, disciplined bettors with smaller edges survive and compound.

Your staking strategy is as important as your bet selection.

The Three Main Approaches

1. Flat Betting

How it works: Bet the same amount on every bet, regardless of edge or confidence.

Example: 1 unit on every bet, whether it's a 2% edge or 8% edge.

Pros:

• Simple to execute
• Low variance
• Prevents overconfidence mistakes
• Easy to track

Cons:

• Doesn't maximize value on high-edge bets
• May underbet strong opportunities
• Ignores that some bets are better than others

Best for: Beginners, bettors who struggle with discipline, or when edge estimation is uncertain.

2. Percentage of Bankroll

How it works: Bet a fixed percentage of your current bankroll (e.g., 2% of bankroll per bet).

Example: Start with $5,000 bankroll, bet 2% ($100). After a $1,000 profit, bet 2% of $6,000 ($120).

Pros:

• Automatically scales with bankroll
• Protects during losing streaks (bets shrink)
• Accelerates during winning streaks
• Never technically goes broke

Cons:

• Still doesn't account for edge size
• Recovery after losses is slower (betting smaller amounts)
• Can feel psychologically difficult to reduce stakes

Best for: Bettors who want automatic bankroll protection without complex calculations.

3. Kelly Criterion

How it works: Bet size proportional to your edge divided by the odds.

The Kelly Formula:

f* = (bp - q) / b

Where:
f* = fraction of bankroll to bet
b = decimal odds - 1
p = probability of winning
q = probability of losing (1 - p)

Example:

• Your edge suggests 55% win probability
• Odds are -110 (1.91 decimal)
• b = 0.91
• Kelly stake = (0.91 × 0.55 - 0.45) / 0.91 = 5.5% of bankroll

Use our Kelly calculator to run these calculations instantly.

Pros:

• Mathematically optimal for bankroll growth
• Bets more on bigger edges
• Bets less on smaller edges
• Proven by decades of financial mathematics

Cons:

• Requires accurate edge estimation
• Full Kelly is high variance
• Overestimates lead to ruin
• Complex to calculate manually

Best for: Experienced bettors with reliable edge estimation and discipline to use fractional Kelly.

Fractional Kelly: The Practical Approach

Full Kelly betting is optimal in theory but impractical for most bettors:

1. Edge estimation is never perfect
2. Full Kelly variance is intense (30-40% bankroll swings)
3. Psychological stress leads to poor decisions

Fractional Kelly reduces these problems:

• Half Kelly (50%): Reduces variance significantly, gives up minimal expected growth
• Quarter Kelly (25%): Much smoother ride, still captures most of the edge
• Eighth Kelly (12.5%): Very conservative, good for uncertain edges

Most professionals use half or quarter Kelly. The reduced variance makes for a sustainable career.

In Bet Hero settings, you can configure your Kelly fraction (full, half, quarter, or eighth), and our wager recommendations automatically adjust.

Comparing the Methods

If you could only pick one:

• Flat betting for beginners
• Fractional Kelly (quarter or half) for experienced bettors

Common Staking Mistakes

1. Betting Based on Confidence, Not Edge

"I feel really good about this game" is not a reason to bet more. Your confidence doesn't change the math.

Fix: Use a systematic approach. Bet size should come from calculated edge, not gut feeling.

2. Increasing Stakes After Losses

Trying to "get back to even" by betting bigger is a recipe for ruin. Variance doesn't care about your mental accounting.

Fix: Stick to your system. If you're flat betting 1 unit, bet 1 unit whether you're up 10 or down 10.

3. Overestimating Your Edge

Kelly assumes you know your edge. If you think you have 8% edge but actually have 2%, you'll bet 4x too much.

Fix: Be conservative with edge estimates. When in doubt, underestimate.

4. Using Full Kelly

Full Kelly maximizes long-term growth but creates violent swings. A 50% drawdown requires 100% return to recover.

Fix: Use fractional Kelly (half or quarter). You sacrifice minimal growth for major variance reduction.

5. No Maximum Bet Cap

Even with Kelly, individual bets shouldn't exceed 3-5% of bankroll. Edge estimation errors can be catastrophic.

Fix: Cap maximum bet at 3-5% regardless of calculated Kelly stake.

Building Your Staking System

Step 1: Determine your bankroll

This is money you can afford to lose, separate from life expenses. Be honest.

Step 2: Choose your base approach

• New to betting? Flat bet 1-2% of bankroll
• Some experience? Fixed percentage (1-3%)
• Confident in edge estimation? Fractional Kelly

Step 3: Set guardrails

• Maximum bet: 3-5% of bankroll
• Minimum bet: Enough to matter psychologically
• Reassess bankroll: Monthly, not daily

Step 4: Track everything

You can't know if your staking is working without data. Use our bet tracker to log stakes and analyze results.

Staking by Bet Type

Different bet types warrant different approaches:

High-confidence, low-odds bets (spreads at -110): Standard Kelly or flat betting works well.

Low-confidence, high-odds bets (underdogs, props): Use smaller fractions. Edge estimation is less reliable on plus-money bets.

Parlays: If you're betting parlays (generally -EV), use small flat stakes for entertainment only.

Futures: Small stakes. Your money is tied up for months, and variance is extreme.

Arbitrage: Stake sizing is determined by the arb calculation, not Kelly. Use our arbitrage calculator for exact amounts.

The Psychology of Staking

The best staking system is one you can actually follow.

Full Kelly might be mathematically optimal, but if you panic and deviate during a 30% drawdown, it's not optimal for you.

Choose a system that:

1. You understand
2. You can execute consistently
3. Lets you sleep at night

Consistency beats optimization. A slightly suboptimal system followed perfectly beats an optimal system followed poorly.

Key Takeaways

• Staking strategy is as important as bet selection for long-term results
• Flat betting is simple and low-variance; good for beginners
• Percentage betting automatically scales with bankroll
• Kelly criterion maximizes growth but requires accurate edge estimation
• Use fractional Kelly (half or quarter) to reduce variance significantly
• Cap maximum bets at 3-5% regardless of calculated Kelly stake
• Avoid betting based on emotion or trying to recover losses quickly
• Track your stakes in our bet tracker to analyze performance
• Use our Kelly calculator for precise stake recommendations
• Consistency matters more than perfection; choose a system you can follow