Most knowledgeable bettors are familiar with the concept of expected value (EV) and how to use it. If you aren’t, stop. Read this Trademate Sports explainer first. Far fewer bettors are familiar with the concept of expected growth (EG). Well, at least they don’t THINK they are. They’ve heard of the Kelly Criterion (if you haven’t, Trademate explains that here too!), and they know it’s supposed to maximize something. That “something” is expected growth.
In short, EG is the percentage by which your entire bankroll grows (in the long run) when doing whatever it is you’re doing. That “something” can be making an independent bet (one that has no connection or correlation to any other bet you have open), but it can also be making several bets that are correlated somehow, or betting in a correlated way with some of your existing bets. The Kelly Criterion formula of “edge over odds” only applies to that first case, where the bet you’re making has no relation to any other current or future bet. How can you figure out your expected growth for those other cases? Well, first let’s figure out why we should want expected growth above all else.
Why should you want it?
We all know that the goal of betting on sports is to make money. But, how much money do you want to make? This is not a trick question. If you said “a million dollars,” then more power to you! If all you have is $1,000 to start, then it’s going to be a tough road. Say you can find someone who’s willing to flip a coin with you 10 times for a 1:1 payout (2.0 in odds), and at any stake you like. You could flip 10 times with them, going double or nothing each time you win, and have over $1 million if you win all 10. Of course, if you lose even once you’re broke. No million for you, not even your original $1k.
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Originally published at http://www.tradematesports.com.