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Staking plans in sports betting under unknown true probabilities of the event

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  • Barge-Gil, Andrés
  • García-Hiernaux, Alfredo

Abstract

Kelly staking method has been shown to maximize long-term growth of bankroll. However, it demands for the estimation of the true probabilities for each event. As a result many sport tipsters have abandoned this staking method and opted for a flat staking plan ('unit loss') or, less frequently, an 'unit win' plan. We analyze under which assumptions these methods correspond to the Kelly staking method and propose a different staking plan: 'unit impact,' under the hypothesis that this plan fits better with the Kelly staking method. We test our predictions using a betting database from Pyckio, one of the most popular tipster platforms in the world. Results show empirical support for our hypothesis.

Suggested Citation

  • Barge-Gil, Andrés & García-Hiernaux, Alfredo, 2019. "Staking plans in sports betting under unknown true probabilities of the event," MPRA Paper 92196, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92196
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    sports betting; Kelly criterion; staking methods; tipster;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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