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

Andrés Barge-Gil and Alfredo Garcia-Hiernaux

MPRA Paper from University Library of Munich, Germany

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.

Keywords: sports betting; Kelly criterion; staking methods; tipster (search for similar items in EconPapers)
JEL-codes: D81 G11 L83 (search for similar items in EconPapers)
Date: 2019-02-15
New Economics Papers: this item is included in nep-spo
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