Kelly Criterion Calculator

Written by: Alex Windsor
Fact checked by Brian Webb  
Updated: June 18, 2024

The Kelly Criterion is a formula for calculating the optimum bet size relative to your bankroll and the implied odds and actual (true) odds. In other words, the formula can help you determine the optimal amount of money (bet size) you should risk (invest) relative to the true odds and implied odds of winning.

However, the formula can be challenging to understand, which is why you should use our Kelly Criterion calculator. We will discuss the formula’s basic concepts and explain how it works in sports betting.

KELLY CRITERION CALCULATOR
Decimal
Fractional
American
Bookmaker Estimate (%)
00.00%
Recommended Stake (%)
Recommended Stake - FKB adjusted (%)
00.00%
Recommended Stake - FKB adjusted
00.00
Return on wagered funds
00.00%
Expected value for bet
00.00
Overall potential profit
00.00

What is the Kelly Criterion?

At its core, the Kelly Criterion is a mathematical formula used in probability theory to calculate the right bet size for optimal return. It has found mass application in investment and gambling. Sports betting is all about probabilities, and in that sense, the Kelly Criterion is one of the most effective methods for placing smart bet amounts that ensure a profit in the long run.

In sports betting, the Kelly formula is used to compute the optimal bet size only when the odds are in your favour. Depending on the value of the odds, the bet size can differ, hence the emergence of Kelly calculators. You can also use a regular calculator if you learn how the formula works, which we explain next.

Breaking Down the Kelly Criterion Formula

The Kelly Criterion formula is as follows:

f = (bp – q) / b

  • F – the optimal bet size relevant to your bankroll, represented as a percentage value.
  • B – a bet’s decimal odds value (eg: 2.5, 2.10, 1.90, etc.).
  • P – The implied/true probability (odds) of winning (eg: 47%=0.47).
  • Q – the probability of losing (eg: 53%=0.53)

Note: You might want to use an odds converter to convert to American odds.

How Does it Work in Sports Betting?

Theoretically, the Kelly Criterion is simple. In practice, not so much. As you see, there are three main variables, four if you factor in the size of your bankroll.

In principle, the formula allows you to come to a number, representing a percentage value. That number, for instance, can be 0.09, indicating that 9% of your bankroll would be the optimal bet size relevant to the probability of winning a bet. You can easily determine the probability of losing relevant to the win probability.

The Kelly multiplier indicates how much of the Kelly Criterion calculator’s suggested bet size you want to bet. We recommend you use values between 0.5 and 1, although 0.5 is recommended for low-risk bettors. The Kelly multiplier is usually automatically set at 1.

Once you enter those values into a Kelly formula calculator, the calculated number will indicate the optimal portion of your bankroll to bet.

How the Kelly Criterion Formula Works: An Example

To understand how the Kelly Criterion works, and how to use it, you must know about implied (given) odds (probability), and true odds. Bookmakers usually manipulate the actual odds of an outcome to create an edge and establish the true and consequently implied probability. This is how they turn a profit. However, unless you’re an experienced handicapper, only the sportsbook would know the true odds of an outcome.

Below, we will provide an example of implied odds and assume the true odds are relatively close to the implied odds, which is always a good sign. A major discrepancy between the implied and true probability is a red flag.

For example, you want to bet on an outcome with implied odds of 2.00 (+100 American). The odds are favourable, and there’s room for potential gain. Let’s say that the true odds are 2.15 (+114 American). An outcome with 2.15 true odds would have a win probability of 46.5% (0.46). The loss probability is 53.5% (0.53). The values are as such:

  • B – 2.15 (+100)
  • P – 46.5% (0.46)
  • Q – 53.5% (0.53)

The Kelly Criterion formula (bp – q) / b will calculate these values in the following manner:

(2.15 x 0.46 – 0.53) / 2.15 = 0.21.

Based on this estimation, the F value is 0.21 and you should bet 21% of your bankroll for this specific bet. If, for example, you have a £300 budget, your bet should be £63. If you set the Kelly multiplier to 0.5, the recommended bet size will become smaller, which is advisable for low-stakes bettors.

How to Use Our Kelly Criterion Calculator

Our Kelly Criterion calculator is simple but effective. You only need to fill out a handful of boxes with the required values to generate the desired number.

First, input the bet’s odds in the odds box. Next, input the estimated win probability. You can use our odds calculator to quickly calculate the win probability by simply inputting the given sportsbook odds in the relevant field. Set your Kelly multiplier value (0.5 is recommended for small-stake bettors). Finally, enter the size of your bankroll and tap the ‘Calculate’ button.

Betting calculators are one of the most effective tools a punter has at their disposal. Make sure you use any advantage you can get when placing your bets.

Benefits/Drawbacks of the Kelly Criterion in Sports Betting

The Kelly Criterion has benefits, but it can be a complex formula to implement if you’re a beginner.

Pros

  • Can be applied to singles and combined bets
  • Mathematically proven betting formula
  • An effective strategy in the long run if applied properly
  • Allows you to place valuable bets with positive expected value

Cons

  • Complex to understand for beginners
  • You must understand basic handicapping to work out the true odds

Alex, a ten-year iGaming industry veteran and Managing Editor at BettingTools specializes in sports betting and betting tools. He also provides insightful reviews, ensures the accuracy of all offers, and maintains content quality helping you make informed choices. Combining professional expertise with a passion for football and soccer, Alex ensures we offer you a reliable resource, focusing on betting tools to assist with odds, parlays, and other betting strategies.