Originally, I wrote this big sexy article on bankroll management
and all the things we could learn from its connection to the casino.
It had funny pictures from The Hangover, Rainman
references, and tons of cool advice. I personally found it riveting,
but after showing my friends (who are beginner DFS players) and
getting two blank looks- I realized two things. First, I wrote
the article on way too much Adderall. It looked like the chalkboard
in Good Will Hunting. Second, it was too theoretical,
and not very helpful for a beginner DFS player in understanding
the practical importance of bankroll. So I went back to the drawing
board. As they say, if you can’t explain it to a six-year-old,
then you don’t understand it well enough yourself. And the
random six-year-old I tried to explain this to on Adderall for
a second opinion, really hit that point home. So let’s try
again.
Success in gambling, no matter the game, is tied to two factors:
perfect strategy and bankroll management. The reality is more
people actually excel at perfect strategy than the simple task
of managing a bankroll. To illustrate the importance of bankroll
we are going to use a player named John. He is a 60% winner in
50/50 or cash games, and is thus a perfect example. He was also
the first friend to tell me he didn’t get it. So if he doesn’t
get the importance of bankroll management after seeing charts
with his name on them, then we can’t be friends anymore.
If you are a 60 percent average winner in cash games, it is unlikely
you win at 60 percent every single week. Some weeks you win 80%
of your games, other weeks you maybe win 40 percent. Take a look
at the charts below. In chart 1, John makes bets with his gut,
often riding the highs and scaling back in the lows. In chart
2, John uses proper bankroll management. If you are DFS beginner,
I think you’re going to like what you see.
Bankroll from the
Gut
Week
Bet Size
% of BR
Win %
Winnings
New BR
1
$100
10%
60%
$120
$1,020
2
$102
10%
80%
$163
$1,081
3
$108
10%
80%
$172
$1,145
4
$115
20%
80%
$184
$1,214
5
$365
30%
60%
$438
$1,287
6
$515
40%
40%
$412
$1,184
7
$236
20%
40%
$188
$1,136
8
$227
20%
40%
$181
$1,090
Totals
60% avg
$90
Let’s walk through chart 1. He begins with 10% of his total
$1000 bankroll, great work so far. However, after having a few strong
weeks, he falls victim to the hot hand fallacy and begins to increase
his bet percentage. In Week 4 he feels like a genius. He increased
his bet and he hit… cold beers all around. In Week 5, he increases
it again, after all, it worked really well last week. And even though
the return is less than the previous weeks, he still wins! In Week
6 he goes for gold. He feels a big win, he feels it deep down in
his plums. Alas, he loses and wipes away a big chunk of profit.
John quickly realizes he got ahead of himself and tapers down his
bets. At the end of eight weeks, he has made $90.
Now let’s take a look at chart 2. John’s a machine,
a terminator, a border security agent. He has no emotion, he isn’t
moved by wins or losses and he doesn’t believe that you’re
going to Sasquatch music festival with no drugs in the car. With
this strategy you can see that by maintaining his strong win percentage,
and also managing his bankroll, he has nearly doubled his profits
in the same amount of time.
Proper Bankroll
Management
Week
Bet Size
% of BR
Win %
Winnings
New BR
1
$100
10%
60%
$120
$1,020
2
$102
10%
80%
$163
$1,081
3
$108
10%
80%
$172
$1,145
4
$115
10%
80%
$184
$1,214
5
$121
10%
60%
$145
$1,238
6
$124
10%
40%
$99
$1,213
7
$121
10%
40%
$96
$1,188
8
$118
10%
40%
$94
$1,164
Totals
60% avg
$164
Chapter 2 - Initial Bankroll Deposit into
your Fanduel/ Draftkings Account
First, you need to decide how much you want to risk. The key
here is to deposit an amount that would not affect your quality
of life. I call it the ticket effect. Imagine you just got a speeding
ticket. What amount on that ticket would ruin your month and possibly
compromise your lifestyle? Whatever that amount is, start with
that. Some people also suggest starting with no more than 5% of
your monthly salary. If you earn $6000 per month, then $300 is
your entry point. Oddly enough I find this usually comes out to
the same speeding ticket number for most people. There is no hard
and fast rule. This is known as your bankroll. You do not bet
your whole bankroll weekly, you bet a percentage of it. This strategy
will help you ride through the lows and highs.
Chapter 3 - Amount of Bankroll in Play
Each Week
We will not play any more than 10-20% of our “parking ticket”
bankroll per week. Whatever number you choose, be consistent.
This is a multi-year strategy. There is always next year. Do not
bounce from 10% to 20% to 40% based on recent wins and losses
as you see in chart 1 above. Some say that because the NFL season
is only 16 games, a larger percentage such as 20% should be placed
on the table each week. I do not agree. The NFL season is 16 games,
but your career as a sports gambler, if done correctly, could
be however many years you would like it to be. If you plan to
be a football and DFS fan for ten years, extend your charts to
160 weeks (I don’t advise playing Week 17, the risk is too
high), then take a look at the power of compounding. Bankroll
suicide happens when one bounces their amount in play on gut feelings,
and takes a short term view. Don’t be that guy.
Chapter 4 - Games to Choose
We want to play our bankroll allowance in games that give us
the best chance of winning consistently, and we want to avoid
games that have the odds stacked against us. Therefore we are
going to build our bankroll first using 50/50 and Head-to-Head
games. This gives us the best possible chance to win- week in,
week out, using consistent, low variance lineups. We are also
going to play large-payout tournaments, with only a small investment.
More precisely, with our weekly bankroll allowance, we are going
to play 80/90% cash games and 20/10% tournaments. The probability
of winning a GPP tournament is incredibly low, however the average
player cannot maintain a 60% win percentage and hitting a GPP
tournament drastically improves your total ROI. Some players are
better at finding success in tournaments, some are better at excelling
in 50/50 games. Play a safer ratio first while you find out what
sort of player you are, and then switch to a more custom strategy
when you are ready.
Chapter 5 - Buy-in to Choose
We want diversification, and we also want weak opponents. Play
the largest number of low entry fee cash games that your 80/90%
cash game bank roll allowance will allow. Newer and less skilled
players typically play here; it will also increase diversification.
If you have $200 in play for example, we ideally want 200 $1 contests.
You will run out of contests however, at which point it is okay
to move $2 games. At a certain point your bankroll will be so
large that you’ll need to change your entry strategy, targeting
$5-10 games. A good rule of thumb is you want each game to represent
no more than 5% of your weekly bankroll allowance.
Chapter 6 - Wait! But How Many Lineups?
Stay tuned for more lessons that I have trouble explaining to
six-year-olds.
