What is the Kelly Criterion?
The Kelly Criterion is a mathematical formula that works out the optimal percentage of your bank to stake on a bet, given the odds and an estimated probability of winning. The idea: maximise long-term bankroll growth without going bust on a bad run.
The basic formula is f* = (bp - q) / b, where:
- f* is the fraction of the bankroll to stake
- b is the decimal odds minus 1 (the net profit per unit staked)
- p is your estimated probability of winning (0 to 1)
- q is the probability of losing (1 − p)
Why is half-Kelly the recommended setting?
Full Kelly assumes your probabilities are exact. In the real world they almost never are — there is always estimation error. Half Kelly (staking half of what Kelly recommends) protects against that error and cuts variance dramatically, giving up only about 25% of the theoretically optimal growth. It's the sweet spot between growth and survival.
When not to use Kelly
- If your estimated probability is inflated: Kelly amplifies errors. If you say 60% but the real number is 50%, you lose fast.
- On several correlated picks: Kelly assumes independent events. Five matches from the same tournament are not independent.
- If your bankroll is very small: the bookmaker's minimum stakes can make Kelly's recommendation impractical.
💡 The gambeta.ai AI publishes picks with the model's probability, the odds and a suggested stake — all worked out internally with a modified Kelly. If you want to see the maths applied to real picks, the daily predictions are there.
How to use this calculator
- Enter the decimal odds (European format: 2.10, 1.85, and so on). If your bookmaker shows a different format, convert them first in the odds converter.
- Estimate the real probability of winning. This can come from a quantitative model, an AI, or your own read of the game. Be conservative.
- Enter your total bankroll — the money you consider set aside for betting and nothing else.
- Pick the Kelly fraction. Unless you have years of experience tuning this: use half (½) or quarter (¼).
- The calculator shows the optimal stake as a percentage and as an absolute amount.