I am sure you would have heard comments like, 'if you don't have good money management skills then you simply won't win'; or how about 'money management is much more important than the selection strategy used'; or even 'you won't win if you don't have good money management skills'. There will always be a group of punters who is always bleating about the virtues of money management. These punters believe that this mystical term 'money management' is a saviour, which will turn their otherwise unprofitable approach magically into a highly profitable one, simply by changing the way they stake. I can tell you that there is as much chance of this happening as there is of Jess going on a date with Nicole Kidman.
Now I realise, that I might be stepping on your toes a little here, especially if you too have been brainwashed by the folks who worship these two words. As with anything else in this article, it is just an opinion and you are free of course to ignore completely what I have to say. I admit that I probably should not really feel as strongly as I do, but I tell you, I get some really horrible thoughts entering my mind whenever those two words are spoken.
Okay, what is all the fuss about? Just what is the difference between bankroll management and money management?
Money management (in my opinion) is when a punter is trying to make money from any form of gambling, purely by using some sort of staking approach. As we all know, it doesn't matter which game we choose (horse racing, craps, sports betting, roulette etc), if we bet 'blindly', make no mistake about it, we lose. That is to say, that if we bet on number 7 on a roulette wheel for long enough, eventually the casino will end up with our money. We might get lucky in the short-term however, but reality will set in over a half reasonable time period.
However, if you think you can beat one of these games by purely changing the amount that you stake per race/bet/spin/hand etc, then you are still playing a losing game. That is, you are trying to use money management to beat the game. Playing a poor game, but trying to win simply through staking.
We know that if we exercise our skills and knowledge, then we can turn the majority of gambling activities into profitable exercises. (Some games are easier to beat than others).
Bankroll management, on the other hand, is the decision how to stake your selections ONCE you have found a profitable approach. It is when you are winning, that you need to think about how to stake your money, NOT before you have shown that you can turn a profit, using a specific approach by betting level stakes, which is simply, the same amount every bet.
Essentially, that is the difference. Punters who try to beat a game solely through staking are using money management. It may be great fun, don't get me wrong, but not so good for the wallet.
Now it would be ignorant and arrogant of me not to mention the fact, that this whole idea of staking is quiet contentious. There a millions upon millions of punters who will swear (maybe even the majority of punters) that you can turn a losing approach into a profitable one through 'clever money management'. If that is the case, then please, don't let me stop you. The best thing that any punter can do is continue with whatever is successful for them. Very simply, if your staking approach works for you, then by all means, go ahead and continue.
I, on the other hand, prefer to use approaches, which actually may be proven to work, and that is where we get into bankroll management. How to make the most of a profitable approach is what bankroll management is all about, NOT how to find a winning approach through staking. If you don't have a profitable approach, then there is NO way that you can find a profitable approach through simply staking your selections differently. This is not an idea or a hunch - this is a decade old mathematically proven fact!
Whether punters want to listen and discover what is proven to work, or if they want to throw their heads in the sand, and claim that this is all 'academic wank' and that it does not work (as a number of punters have kindly told me), is of course up to them.
In saying this, the question has to be asked, that if it were possible to beat an otherwise unbeatable game simply through staking, it would have to be one of the greatest mysteries in the world as to how casinos would be able to exist. Casino games, such as, roulette have much lower house margins, than say, the horse races, sports betting or keno. (For example, 2.7% house advantage on roulette, against 15% - 25% on horse racing, or 5% - 10% on sports betting.) Therefore, if it were possible, one would think that the casinos would be the first to be cleaned out. Wouldn't you? However, I say to you, when ones livelihood depends on these types of decisions, I feel much more confident in relying on approaches, which may be mathematically proven to be successful, even if it is all 'academic rubbish', rather than to rely on hunches and hot streaks. In my experience, hunches and hot streaks do not put the food on the table.
Now in a tournament sense, much of the above does not apply. This is because an entrant is playing directly against another opponent, which makes this the exception to the above rule. This is where it may make sense to use some sort of staking approach which will vary, depending on the opponent's position. In a tournament, such as a casino roulette or blackjack tournament, simply playing your game in a steady and conservative manner will many more times than not, result in you maintaining, or possibly increasing, your bankroll to some extent. However, to win such tournaments, it is essential to use a somewhat more aggressive approach to beat the other players.
Therefore, in closing, if you are a money management fan and believe that the facts are just 'academic wank', and believe that games such as roulette can be beaten purely through staking, then you have one thing over those using the more mathematical approaches - you will always be welcome with open arms at any gambling establishment.
We have developed a betting simulation program that can be uses to predict your likely outcome over a series of bets. This program is available free from our website using the following address:
http://www.puntingace.com/bettingdownloads/bettingsimulation.htm
you can then test the profitability of your money management or staking plan without actually having to endure the pain of a losing a vast sum of money in the process.
We plan to delve into the staking approaches in reasonably great detail in the coming months. We will be supplying the approaches, which we believe are mathematically sound methods to handle your bankroll once you have found a profitable game, and no, they will not all be packed full of maths. There are some quick and easy ways to improve your bankroll management.
About the Author: Australians Matt Elliott and Jess Kirley, at http://www.puntingace.com have been investing together professionally on sports for over 3 years now. They take a very mathematical approach to their betting, and liken it more trading a commosity like stocks than actual gambling. They continue to lead the industry with innovative approaches to sports betting and their reputation among their peers is testament to that. Visit http://www.puntingace.com to discover how you too can turn your hobby of betting into a profitable endeavour.