Kelly Criterion for Sports Betting (Plain English)

The Kelly Criterion answers a hard question: given your edge on a bet, how much of your bankroll should you risk to maximize long-term compound growth?

The formula for a single bet: - f* = (bp − q) / b - Where: - f* is the fraction of bankroll to risk - b is decimal odds minus 1 (i.e., the payout odds) - p is your true probability of winning - q is 1 − p

Worked example. You have a 55% true probability of winning a -110 bet (decimal 1.91): - b = 0.91, p = 0.55, q = 0.45 - f* = (0.91 × 0.55 − 0.45) / 0.91 = (0.50 − 0.45) / 0.91 = 0.055 - Risk 5.5% of bankroll on this bet to maximize growth.

Why nobody bets full Kelly: - Kelly assumes you know p exactly. You never do. - Variance at full Kelly is brutal — drawdowns of 50% or more are common. - Most winning pros use fractional Kelly: half-Kelly (0.5×) or quarter-Kelly (0.25×).

Fractional Kelly: - Half Kelly cuts the variance in half but only loses about 25% of the long-run growth rate. - Quarter Kelly is the most popular pro setting. Smooth equity curves, real growth.

In practice on CleverBet: - Slick sizes plays in standard units, mostly 1u or 2u. - One unit at 1% of bankroll roughly approximates quarter-Kelly for a 55-58% bet at -110. - This is why you see 1u as the default and rarely see anything above 2u — quarter-Kelly on the highest-conviction plays.

Kelly is a tool, not a religion. The formula gives you the math-optimal answer. Fractional Kelly gives you the math-optimal answer that you can actually live through.