Flat Betting vs Kelly Criterion

Every serious bettor eventually faces the same question: how much should I stake on each bet? It sounds simple, but your staking strategy can affect your results just as much as your ability to find value. Stake too aggressively and a bad run wipes out your bankroll. Stake too conservatively and your edge never translates into meaningful profit.

Two approaches dominate this conversation: flat betting and the Kelly Criterion. Both have genuine merits, and choosing the right one depends on your experience level, risk tolerance, and how confident you are in your probability estimates.

What Is Flat Betting?

Flat betting means wagering the same fixed amount on every bet, regardless of how confident you feel or how large you believe your edge to be. If your unit size is 2% of your bankroll, you bet exactly 2% every single time - whether you think you have a 1% edge or a 15% edge.

The appeal of flat betting is its simplicity. There is no complex calculation involved, no formula to apply, and no room for second-guessing your stake size. You decide on a percentage, apply it consistently, and let your selection ability do the heavy lifting over time.

Advantages of flat betting:

It is simple to implement - no maths beyond basic percentages. It naturally limits the damage from losing streaks because no single bet is ever oversized. It removes emotion from the staking decision entirely. And it is easy to track and review, making performance analysis straightforward.

Disadvantages:

The main weakness is that flat betting does not account for the size of your edge. You stake the same amount on a bet where you think you have a 1% advantage as one where you estimate a 12% advantage. From a purely mathematical standpoint, this is inefficient use of your capital.

What Is the Kelly Criterion?

Kelly Criterion staking strategy guide

Kelly % = (bp - q) / b

Where b equals the decimal odds minus 1, p equals your estimated probability of winning, and q equals 1 minus p (the probability of losing).

Let us walk through a practical example. Say you estimate a 55% chance of winning at odds of 2.10. Here b = 1.10, p = 0.55, and q = 0.45. Plugging into the formula: Kelly % = (1.10 x 0.55 - 0.45) / 1.10 = 0.1545, or roughly 15.5% of your bankroll.

That is a very large stake on a single bet, and this highlights both the theoretical power and the practical danger of using full Kelly.

Advantages of Kelly:

It is mathematically proven to maximise long-term bankroll growth rate. It automatically stakes more when your edge is larger and less when your edge is thin. And it inherently adjusts as your bankroll grows or shrinks.

Disadvantages:

It demands highly accurate probability estimates - if your estimates are even slightly off, Kelly will systematically over-stake or under-stake. Full Kelly produces extreme variance, with drawdowns that can exceed 50% of your bankroll. And it is considerably more complex to implement consistently compared to flat betting.

The Variance Problem with Full Kelly

Full Kelly staking makes one crucial assumption: that your probability estimates are perfectly accurate. In the real world, they never are. Even seasoned bettors with years of data regularly misjudge probabilities by several percentage points. And because Kelly scales stake size with perceived edge, small errors in your estimates translate directly into oversized bets.

This is why the vast majority of experienced bettors who use Kelly actually use a fractional version - most commonly half Kelly or quarter Kelly. Half Kelly means you stake exactly half of what the full formula recommends. This reduces your theoretical maximum growth rate by about 25%, but it cuts your variance roughly in half. For most people, that trade-off is not just acceptable but strongly preferable.

Quarter Kelly is even more conservative and suitable for bettors who are still building confidence in their probability estimates or who have a lower tolerance for drawdowns.

Which Approach Performs Better?

In a theoretical simulation with perfect probability estimates, Kelly betting outperforms flat betting every time. It grows the bankroll faster because it allocates capital efficiently, betting more when the edge is large and less when it is small.

In practice, the advantage narrows considerably. Real-world probability estimates contain errors. Markets shift. Bookmakers limit accounts. Variance is higher than models predict. When you factor in these realities, the gap between Kelly and flat betting shrinks, and in some cases full Kelly actually underperforms flat betting because it over-stakes on bets where the perceived edge was not real.

Flat betting is inherently more forgiving of estimation errors. Even when your probability estimates are imperfect, you are never risking a disproportionate amount on any single bet. Your results will be more stable and your drawdowns shallower, even if your ceiling for growth is somewhat lower.

A Practical Staking Framework

Here is the approach I would recommend for most bettors based on their experience level:

Start with flat betting.

Graduate to fractional Kelly.

Avoid full Kelly.

How the Right Tools Help Either Approach

OddsNotifier EV scannerdropping odds alerts

advanced value betting strategies guide

Choosing What Works for You

Flat betting and Kelly staking are both legitimate, well-tested approaches. Flat betting wins on simplicity, safety, and forgiveness of errors. Kelly wins on theoretical efficiency and capital allocation. For the majority of bettors, starting with flat staking and evolving toward fractional Kelly as your skill and data improve is the most practical and sustainable path forward.

The staking plan you actually stick with over thousands of bets matters far more than the one that looks best in a backtest. Pick an approach, apply it consistently, and let the edge do its work.