Players’ Money Management in Gambling
The ultimate goal of gambling is to win money. Over the years, gambling strategies and systems have been invented by players with the objective to improve their chances of winning.
Gambling money management is the strategy or systems players use to manage their bankroll. For some players, this simply means creating their own winning goals and losing limits and respecting these limits as they play. For other players, money management involves using different betting systems or methods for the purpose of attempting to simply win more than they lose or in an attempt to beat the house.
Popular money management systems
While there are several money management gambling systems that a player can employ as part of their playing strategy, below we’ll take a look at two different and popular money management systems.
With that in mind, it is important to remember that regardless of the money management strategy you employ – no matter if it was created by you or a professional player– there is no flawless betting strategy and no gambling strategy that will ever give you an edge over the house. None of these systems can guarantee you’ll win. Even if certain bets have better outcome probability (e.g. betting on black or red on a roulette wheel instead of betting on only one number), better betting odds do not guarantee a win, ever.
Never forget that when you gamble, you always risk losing, every single time you bet, and you can lose it all.
This is one of the oldest and most well-known progressive betting money management systems. It is also one of easiest to implement in your play. Essentially, after every bet you lose, you double your bet. The theory is that when you win, you’ll have recovered all your previous losses plus a profit that is equal to the original bet. When you win, you go back to betting your initial stake until you lose, in which case you’ll return to doubling your bet until you win.
The purpose of the Martingale system is to help you control your stakes. The problem with this system is that a player would need an unlimited bankroll to get the most out of it. Since no one has an unlimited bankroll, the amount a player will have to bet in order to cover a consecutive stream of losses will eventually bankrupt them. The Martingale is a very dangerous betting system. It is not uncommon for player who use the strategy to start thinking that they’ll have to win soon because they’ve lost several times in a row. The fact is, of course, that the chance for a win is exactly the same as when you first began the betting sequence. You’re always just as likely to lose as you are to win.
Unlike the Martingale, the Kelly Criterion, also known as the Kelly Strategy, Kelly Formula, Kelly Equation or Kelly Bet, is a proportional betting money management system. Instead of increasing the stakes when you lose, progression increases only when you are winning and decreases when you are losing. How much you stake, is based on a percentage of the size of your bankroll in proportion to the edge.
Following this system is also about placing a bet on a potential outcome that you predict has the highest probability to win. This formula only optimises your stake if you are able to predict with a high degree of accuracy.
Although this strategy has great potential to be more advantageous to players compared to progressive strategies like the Martingale, in order for it to really be effective, a player would have to know both the edge and that the edge is in their favour when creating their stake and making their bet. This is very unlikely, and without knowing this information, it is easy to make errors in calculation.
The reality is that regardless of the money management gambling system you employ, the longer you stick to these strategies in a single game session, the more likely you are to lose as much as you bet. This is why it is important to create both winning and losing limits with the money you can afford to play with and respect these limits, regardless of the rules of the gambling strategies you follow. Get into the habit of cutting your losses and quitting while you’re ahead.
Always stay in control of your money
Ultimately, your goal, when it comes to gambling money management, is be in control of the money you play with, every time you play.
- Only gamble with money meant for entertainment purposes
- Never play with money meant for important necessities (e.g. rent, mortgage, bills, etc.)
- Never bet more than you can afford to lose
- Use common sense and stick to your bankroll budget
- Have a winning goal and losing limit. Respect both.
- The house edge is constant. No betting system will change this reality