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Money Management -- Flat Betting
by Ben Burns - 02/28/2008
When one is trying to choose the correct 'side' or 'total' of a game, there are many handicapping styles, techniques and/or systems to choose from. I have a general philosophy which has served me well over the long-term. However, I know other handicappers who have achieved success while taking a completely different approach. In other words, there isn't one specific "right" way to do things.
Being a successful sports handicapper isn't always just about picking more winners than losers though. To be a true winner, one also needs to understand and practice disciplined "money management." Just as there are many different ideas about handicapping, there are also many different schools of thought when it comes to what constitutes "proper" money management. Or, there's more than one way to skin a cat!
Many handicappers like to vary their betting amounts. The idea is that they'd like to wager more on their "stronger" plays and less on their "weaker" ones. This works great in theory and I know of several bettors who use this approach successfully. They've done well through the years, primarily because they've been able to hit a solid winning percentage with their "big" plays.
Determining the difference between a "big" play and a "regular" play can be easier said than done though. I also know of numerous reasonably sharp handicappers who have been unsuccessful long-term bettors because they always seem to be "stepping out" on the wrong games. I've got one friend who particularly epitomizes this trait. Every time I talk to him, he's got a new "bad beat" story. The underlying theme always seems to remain constant though. The conversation inevitably starts off with him saying something like this: "Oh man, I was so close to going a perfect 3-0 yesterday." Without ever waiting for me to ask what happened, he'll continue by saying: "I already won the first two games and I looked in really good shape for the sweep..."
When he starts describing how and why bad luck cost him in the third game, I typically respond with my usual: "There's nothing wrong with going 2-1. You must have had a pretty good day?"
He doesn't have to answer, as I already know what's coming next. It's always something like: "Nope. I bet twice as much on the game that lost so made nothing at all. In fact, I even managed to lose some money as I also had a 3-game parlay in the mix." Of course, that's the danger of varying one's wager sizes. One always runs the risk of winning the smaller games and losing the big ones.
Other handicappers swear that it's best to increase one's wagers during a winning streak and decrease one's wagers during a losing streak. This also works great in theory and I know some successful betttors who subscribe to this belief. However, once again this can be easier said than done and can often be dangerous. For starters, what exactly constitutes a winning or losing streak? Does winning five in a row mean that the handicapper is now all of a sudden in a zone and that wager size should be increased? Not in my opinion. Here's a fictional example of how and why this is often dangerous.
"Joe" was in his first full season of serious basketball betting. Although still a relative novice, he had done some research beforehand and had "big" plans. He had a strategy about how he was going to select his games and he knew enough to have a pre-determined "betting bankroll" set aside before getting started. Joe had $20,000 and was planning on wagering to win $400 on each game. So far so good. The problem was that "picking winners" proved a little more difficult than he had originally anticipated. Through the first half of the season, he was just 58-62. In other words, he had 58 winning wagers of $400 each ($23,200) and 62 losing wagers at $440 each ($27,280) for a net loss of $4080. His original bankroll was down to $15,200.
Joe was beginning to get frustrated. He'd had plenty of winning days but he never seemed to be able to string them together for a sustained period. Just when he was starting to consider "giving up," Joe experienced the winning streak that he'd been desperately waiting for. Over a five day period, he had an impressive 16-4 record. All of a sudden, he was above 500 (74-66) and had a bankroll of $20,560! Naturally, Joe was absolutely thrilled with himself for "sticking it out." Having previously read that wager size should be raised during winning streaks, he decided to increase his "unit size" from $400 to $1000. After all, he was "in a zone" and was "seeing the games" better than he ever had before.
Unfortunately, Joe's winning streak was short-lived. In fact, on the very day that he raised his bet size he went just 1-3 for a loss of $2300. He considered going back to $400 per play. However, that would mean that he'd need to win six straight picks just to recoup one day's losses. Once again, he decided to "stick it out" and keep going with $1000 per play. Lady Luck wasn't in his corner this time though. Joe followed up his 1-3 day by going just 10-18 over the following six days. His week long foray into the "big leagues" had cost him $12,100. Although only two games below 500 (85-87) his starting bankroll was down to $8460. Knowing that he'd officially "cooled off" and worried that he might lose his entire bankroll, Joe decided to reduce his wager size down to $200 per game for the rest of the season. He closed out the campaign on a respectable 55-45 run, recouping $1100. That brought his overall record to 140-132. That's obviously not terrific. However, it's also not that terrible, especially considering that it was Joe's first full season. If he had stuck with his original plan of wagering $440 to win $400 on every play, he would have lost a total of $2080. Instead, by attempting to "press" during his winning streak, he managed to lose a whopping $10,440.
Assuming one has proven to be a capable handicapper, I personally believe that the "safest" and most logical approach is to play each game equally, regardless of winning or losing streaks. This allows one's longterm record to dictate success or failure and eliminates the possibility of the above scenario occurring. Obviously, if one knew how to predict winning and losing streaks, it would be terrific to "pull back" when losing and "press ahead" when winning. No one truly knows when the next winning or losing streak is going to occur though. I've gone through times when I've won for many days in a row and am feeling on top of the world, only to suddenly lose for a few days in a row and/or suffer a losing week. Conversely, I've also experienced instances where I've lost for a few days in a row. Just when it feels like an extended cold stretch might be about to set in, I'll surprise even myself by "catching fire" and experiencing another lucrative run. The point that I'm trying to make is that it's not easy to predict winning and losing streaks, at least not for me.
Likewise, I personally don't play my "big" plays for any more than I play my "regular" plays for. Yes, the plays I feel strongest about have performed at an excellent rate over the longterm. However, I feel extremely confident in ALL my plays. If I didn't, I wouldn't be betting them at all and/or releasing them publlcly with my name attached to them. I also know that they are ALL capable of going through both winning and losing streaks. even the "biggest" ones. This past Tuesday was a perfect example. I released seven "guaranteed" plays and one "free" play. I really liked all eight of my plays, particularly Indiana and Wyoming. My "Game of the Year" plays have been extremely lucrative over the years and I released Wyoming as my "Mountain West Game of the Year." I would have given Indiana an equal "title" but had already won both my Big 10 GOY (Purdue vs. Wisconsin on 01/26) and had also already used my February "Big 10 Game of the Month," a winner on Iowa vs. Ohio State on 02/02. Therefore, I called Iowa my "Big 10 Game of the Week" instead. I ended up winning with Iowa and losing with Wyoming. The "other plays" went a combined 5-1 for the day though, bringing me to 6-2 overall. Betting each game equally made for a highly profitable day. However, if varying wager sizes, one could have easily decided to "step out" more heavily on the Wyoming game, which would have cut into the otherwise substantial earnings.
As mentioned, there's more than one way to skin a cat when it comes to "money management and there isn't necessarily one "correct" way. I don't judge others' methods and I certainly wouldn't suggest anyone stop doing something which has already been successful for them. However, betting an equal amount (1 unit) per game (flat-betting) has proven to be very profitable for me for several years now. That's why you won't see "unit flucuations" with any of my plays. Whether it's my "Game of the Week," my "Personal Favorite," the Super Bowl or just a plain old "regular" play, they're all worth an equal one unit. Thanks for reading and make sure to check back, as I'll expand on this topic in a future column.