In my opinion the NFL is the greatest sport on the planet. It has gotten to that level mainly because it lends itself to gambling like no other. It is hard to find someone who is not in an office pool, fantasy league, or just likes to place a bet on a few games a weekend. Even my 86 year old grandmother likes to get in an office pool or two and she really doesn’t understand the game at all. The NFL can speak out against gambling all it wants but the bottom line is gambling has made the NFL the number one sport in the United States today.
Without doing a scientific study I would imagine a very small fraction of those betting on the NFL really treat it like a business. If you are playing in an office pool then it may not be necessary but if you are betting one or more games each week then you need to treat this like a business. Treating it like a business means you need to prepare yourself before the season starts.
Things you need to do to prepare
Do not move on if you can not determine what your bankroll is for the season. Many of you reading this have gotten themselves in trouble at one time or another because you had no bankroll set aside for the season. Or if you did you did not adhere to it. When you do not adhere to a strict bankroll you can find yourself in debt, taking out a 2nd mortgage, borrowing from friends and family, selling valuables etc. None of these are very attractive options.
When gamblers get themselves in trouble it usually is not because their handicapping was terrible, it is because their money management was terrible. That starts with a bankroll. It is hard to go in debt when you have a set amount of cash put aside for the NFL season. Key word there is cash. If you do not have cash to put aside then do not play. It is that simple. Your bankroll must not be on paper. Most people lie to themselves. They figure they will never lose an entire bankroll so they will come up with some multiple of what they are comfortable losing and base their bets on that.
Many of you will bet on multiple sports throughout the year, especially during the football season. I personally like to have a bankroll for each sport. It keeps me more disciplined. Lets say you play NFL, NCAAF, NCAAB and NBA and you have 10k set aside for this. You can either use the entire 10k as bankroll for all sports combined or you can allocate a percentage to each. Maybe an even split of 2.5k each or a weighted split giving a higher amount to the sports you tend to do better at. This of course is a personal preference. The key is having the bankroll in the first place.
2. Risk Management (basic strategy)
You now have a bankroll. Next step is to determine how much to play on each game. There are a lot of ways you can go about this. The easiest was is to limit yourself to 1-5% of your entire bankroll per bet. 5% is really pushing it. That is just 20 bets. I would only use 5% if I were using a very small bankroll. You should try and keep things to 1-2% of your bankroll. That gives you some room to play with.
Let’s say you have a bankroll of 10,000. You are strong in the NFL and pretty good in NCAAF and about average in NBA and NCAAB. You decide to allocate your bankroll as follows
|% of Bankroll per game||2%|
|Sport||Confidence||Bankroll||Bet Per Game|
This is a very simple way to do it and a way that limits your risk. Think about the worst run you ever had. The odds are pretty good you would not have blown out your bankroll if you were using this risk management system.
Some of you may be thinking 100 per game is too small. I can never make that much betting 100 per game. Well you won’t make enough to retire that is true but if you are picking successfully you can make a nice return on investment (ROI).
In 2011, using my system you would have made 3,620 or a 72.4% ROI. In 2012 the numbers were 2,320 and 46.4%. To put that in perspective, the best year the S&P 500 has had in the last 40 years was in 1995 when it was up 34.11%. I bring up the stock market because the risks are the same. You can put your entire bankroll on one game(stock) and hit a home run or you can lose it all. If you are going to survive long term you need to properly allocate a small amount of your bankroll to each game(stock).
Those that gamble with a local tend to have the worst money management system. Usually there is no system at all. We have all seen guys put $500 on a game who will struggle to pay a $2,000 debt. This makes no sense. But they do not think it through. What they think is $500 would be nice to have when this game wins. When it loses they will just bet another $500 on the next game. When that loses they will bet either $500 or sometimes $1000 so they do not have to owe. next thing you know they are $2000 in the hole and all they did was lose 3 games. The smart bettor took the same 3 games and lost 6% of his bankroll max. He isn’t going to lose much sleep over that.
In Part 2 I will go over different risk management systems and how to play more exotic style bets.