Wednesday, October 28, 2009

Gambling 101 - Money Management


Unless you are lucky enough to stumble upon a sports almanac like Biff does in Back to Future II, there are some basic principles which every wise gambler should follow for long term success. You can do an excellent job spending hours analyzing games, keeping up to date on injury news and betting trends, but all that work will be for not if you don't follow solid money management practices at the time you make your bet.

It is rare for someone with poor money management to consistently beat Vegas. This can be illustrated with a simple example involving some NFL bets on the spread from Week 7.

Imagine you and your buddy each have $500 to bet the spreads for five games. You both agree on the games you like - feeling the Bears will be an easy cover. Your friend makes the following bets:

Game #1 - Bet $77 to win $70 : Packers (-9) over the BROWNS (Win $70)
Game #2 - Bet $99 to win $90 : Colts (-15) over the RAMS (Win $90)
Game #3 - Bet $247 to win $224: Bears (-1) over the BENGALS (LOSE $247)
Game #4 - Bet $44 to win $40: Saints (-6) over the DOLPHINS (Win $40)
Game #5 - Bet $33 to win $30: Eagles (-7) over the REDSKINS (Win $30)

Your friend was an impressive 4 for 5 (80%) with his picks, but unfortunately his one bad pick was the Bears (Game #3). So instead of running to the bank to collect his winnings, he actually loses $17.00!

You are a little wiser than your friend and bet an equal amount on each game. And unlike your friend you decide to take the Dolphins last minute instead of the Saints as you become convinced that they have a strong chance to upset.

Betting $100.00 to win $90.91 on each game you go 3 for 5 or (60%) for the week, which is still pretty respectable. You WIN 3 x $90.91 - 2 x $100 = $72.73! Almost $90 better than your buddy who did a better job picking the games than you did!

This example is a bit extreme, but it does show the importance of keeping your betting unit consistent when you are gambling. An interesting note: If you had kept the same picks as your buddy in this example, that would add up to a tidy $260+ profit and very solid week of gambling. (Perhaps you might buy your buddy a few drinks to help console him with all your winnings! )

So remember, keeping your betting unit consistent is basic gambling strategy which should be followed when trying to take on Vegas. Whatever betting unit you decide on using (be it $10, $100, or $1000) make sure to stick with it for all bets. If you develop some handicapping skills you will have a much better chance to pull down profits over time by following this basic gambling principle.
Until next time....
thevegaswhale is out!

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