Advanced Staking: Comparing Kelly Criterion vs. Fractional Kelly

In our Basic Staking Guide, we recommended a flat 1-2% stake.

For advanced bettors who want to maximize growth rate, there is a more aggressive mathematical approach: The Kelly Criterion.

What is the Kelly Criterion?

The Kelly Criterion is a formula used to calculate the optimal bet size to maximize the growth of your bankroll over the long term.

It bets more when the edge is high, and less when the edge is small.

The Formula

f = (bp - q) / b
  • f = fraction of bankroll to bet
  • b = decimal odds - 1 (net odds)
  • p = probability of winning
  • q = probability of losing (1 - p)

    • Example

  • Odds: 3.00 (2/1) -> b = 2
  • True Probability: 40% -> p = 0.40
  • Edge: Massive (Implied odds are 2.50)
    • f = (2 * 0.40 - 0.60) / 2 f = (0.80 - 0.60) / 2 f = 0.10 (10%) Kelly suggests betting 10% of your bankroll.

    The Danger of Full Kelly

    Betting 10% on a single horse is suicide.
    Why?
    1. Model Error: If your probability (p) is slightly wrong, Kelly over-bets drastically.
    2. Variance: A losing streak at 10% stakes wipes you out instantly.

    For this reason, almost no professional bets "Full Kelly."

    The Solution: Fractional Kelly

    Pros use a fraction of the Kelly suggestion—usually Quarter Kelly (25%) or Eighth Kelly (12.5%).

    Using the example above (10% Full Kelly):

  • Half Kelly: Bet 5%

  • Quarter Kelly: Bet 2.5%

    • Why Fractional Kelly is Superior

  • Safety: Drastically reduces the risk of ruin.
  • Growth: Still grows the bankroll faster than flat staking (theoretically).
  • Psychology: Much lower volatility.

    • Conclusion

    Unless you have a PhD in statistics and a perfectly calibrated model, stick to flat staking or a very conservative Fractional Kelly.

    The goal is to stay in the game.

    To find the edges that make Kelly staking possible, visit the [Live Odds page](/) and [Value view](/value), then track how those high-edge bets perform over time in your [Selections view](/selections).

    Related Articles

  • What Is Expected Value?
  • Importance of Staking