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Kelly Criterion Calculator

Quick Answer

Kelly formula: f* = (b×p - q) / b. At 52.5% win rate and even money, full Kelly is 5% of bankroll ($50 on $1,000). Half Kelly (2.5%, $25) delivers 75% of maximum growth with half the drawdown risk. Kelly returns 0% for any negative-EV game.
Sources:Bankroll Management GuideSports Betting EV Guide

When to Use Kelly Sizing

Kelly Criterion only produces a non-zero bet size when you have a genuine positive edge. For standard casino games with a house edge, Kelly correctly returns zero. The formula is most useful for:

  • Sports betting when your probability estimate exceeds the market implied probability
  • Clearing casino bonuses on positive-EV terms (low rollover, low-edge games)
  • Prediction markets where you have an information advantage
  • Any repeated positive-EV situation where sizing affects long-run outcome

A common mistake: using Kelly on casino games and entering the casino's advertised RTP as the win probability. That produces a meaningless number. Kelly requires a true edge over the expected value, not just a win rate.

Frequently Asked Questions

What is the Kelly Criterion?

The Kelly Criterion is a mathematical formula that determines the optimal fraction of your bankroll to bet on a positive expected value outcome. The formula is: f* = (b×p - q) / b, where b is net odds, p is win probability, and q is loss probability. Betting at the full Kelly fraction maximizes the long-run growth rate of your bankroll.

Should I bet full Kelly or half Kelly?

Half Kelly is recommended for most practical use. Full Kelly maximizes long-run growth but produces severe short-term drawdowns (a 50% bankroll drawdown is common with full Kelly). Half Kelly achieves 75% of the growth rate with roughly half the variance. Quarter Kelly is suitable for high-variance bets or when your edge estimate is uncertain.

Does Kelly Criterion work for casino games?

Kelly Criterion only applies to positive expected value bets. Casino games at the house edge (crash at 1%, slots at 3-8%) have negative EV, so Kelly recommends a bet size of zero for those. Kelly is relevant for sports betting when you have a genuine edge over the market, and for positive-EV situations like bonus clearing on low-edge games.

How do I convert American odds to net odds for Kelly?

For positive American odds (+150): net odds = (odds/100) = 1.5. For negative American odds (-110): net odds = (100/|odds|) = 0.909. For decimal odds (2.50): net odds = decimal odds - 1 = 1.5. Enter the net odds (not the payout multiplier or decimal odds) in the calculator.

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