The Kelly Criterion is the bet-sizing formula serious bettors use to grow a bankroll without blowing it up. Instead of staking a flat amount on every play, Kelly scales your bet to your edge, betting more when the value is big and less when it is thin. This guide explains the formula in plain English, walks through a worked example, and links you to a free calculator and printable worksheet so you can size your own bets.
What the Kelly Criterion Actually Does
The Kelly Criterion answers one question: given an edge, what fraction of my bankroll should I risk to grow it fastest over time? Bet too little and your bankroll crawls. Bet too much and a normal losing streak wipes you out. Kelly finds the mathematically optimal middle, the stake that maximizes long-run growth while keeping the risk of ruin at zero if your inputs are honest.
The Kelly Formula
The formula is f = (b times p minus q) divided by b. Here b is your decimal odds minus 1 (the net amount you win per dollar risked), p is your estimated probability of winning, and q is 1 minus p, the chance of losing. The result f is the fraction of your bankroll to stake. If f comes out zero or negative, you have no edge and Kelly says bet nothing.
A Worked Example
Suppose you bet a side at -110, which is decimal 1.91, and you honestly believe it wins 55 percent of the time. Then b = 0.91, p = 0.55, and q = 0.45. Plugging in: (0.91 times 0.55) minus 0.45 equals 0.05, divided by 0.91 gives about 0.055. That is a full Kelly stake of 5.5 percent of your bankroll. On a $1,000 bankroll that is $55 at full Kelly, or a more comfortable $27.50 at half Kelly. Your edge on the bet is 5 percent expected value.
Try It: Kelly Criterion Calculator
You do not need to run the algebra by hand. Our free Kelly Criterion calculator takes your odds, win probability, and bankroll and instantly returns the full, half, and quarter Kelly stakes, plus your edge. Enter American or decimal odds and adjust the fraction to match your risk tolerance.
Full, Half, and Quarter Kelly
Full Kelly assumes your win probability is exactly right, which it almost never is. Because your estimate carries error, full Kelly tends to overbet and produce brutal swings. Half Kelly, staking 50 percent of the full amount, keeps roughly three quarters of the long-run growth with far less volatility. Quarter Kelly is safer still. When your probability estimate is a guess rather than a model output, sizing down is the smart move.
Common Mistakes to Avoid
The biggest error is inflating your win probability, since Kelly is only as good as the p you feed it. Overestimate your edge and Kelly tells you to bet far too much. Other traps include using full Kelly on correlated bets, recalculating your bankroll after every single bet in a way that chases losses, and ignoring the vig baked into the price. Be conservative with p, and lean on half or quarter Kelly.
Free Printable Kelly Worksheet
Prefer to work by hand at the sportsbook? Download the free printable Kelly Criterion worksheet to log your odds, win probability, and bankroll, then compute the full, half, and quarter Kelly stakes step by step.
Download the Kelly Worksheet (PDF)
The Bottom Line
The Kelly Criterion turns a vague sense of value into a disciplined bet size. Feed it an honest edge and it protects your bankroll while growing it as fast as the math allows. Use the calculator to run your numbers, lean toward half Kelly, and always bet responsibly and within your means.
