Kelly Calculator

Inputs

%
$

Outcomes

%
$

What Is the Kelly Criterion?

The Kelly Criterion is a mathematical formula used to determine the optimal size of a series of bets to maximize bankroll growth. It was developed by John Kelly Jr. while working at Bell Labs in the 1950s and has become a popular tool for sports bettors, investors, and gamblers.

The Kelly Criterion helps bettors determine what percentage of their bankroll they should wager based on their perceived edge. It aims to balance risk and reward by betting more when you have a larger edge and less when your edge is smaller.

The formula for the Kelly Criterion is: Kelly % = (bp - q) / b, where b is the decimal odds minus 1 (net return), p is the probability of winning, and q is the probability of losing (1-p).

Tips for Using the Kelly Criterion

  • Many professional bettors use a "fractional Kelly" approach (e.g., half Kelly) to reduce volatility
  • Your edge estimation needs to be accurate for Kelly to work properly
  • Kelly is best used as a guideline rather than a strict rule
  • Negative Kelly results indicate that you shouldn't place the bet at all
  • Kelly works best when you have a large sample size of bets over time

Inputs

  • Odds: The American odds of your bet (+100, -110, etc.)
  • Win Probability (%): Your estimated probability of winning the bet
  • Bankroll: Your total betting bankroll

Outputs

  • Kelly Percentage: The optimal percentage of your bankroll to bet
  • Kelly Bet: The dollar amount to bet based on your bankroll

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