Munich Personal RePEc Archive

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

Barge-Gil, Andrés and García-Hiernaux, Alfredo (2019): Staking plans in sports betting under unknown true probabilities of the event.

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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.

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