Kelly Criterion Calculator

How the Kelly criterion works

The Kelly criterion is a formula for sizing bets that maximizes the long-run growth rate of your bankroll. It was derived by John Kelly at Bell Labs in 1956 and has since been adopted by professional gamblers, hedge fund managers, and anyone who needs to size a sequence of favorable bets optimally.

The full formula is f = p − (1 − p) / b, where f is the fraction of your bankroll to wager, p is your estimated win probability, and b is the decimal odds minus 1. When your edge is zero, Kelly tells you to bet zero. When your edge is large, it tells you to bet aggressively.

Why fractional Kelly

Full Kelly is mathematically optimal if your probability estimates are perfect — but they never are. Overestimating your edge even slightly leads to massively oversized bets and painful drawdowns. Most professional bettors bet at ½, ¼, or ⅛ Kelly to reduce variance and protect against overconfidence. ¼ Kelly is a common sweet spot: most of the long-run growth with much less volatility.

When to use this calculator

Use the Kelly calculator any time you have an offered price that differs from the fair price. For example: your favorite book is offering +110 on a spread, but after devigging a sharp book's line you think fair is closer to −110. Enter +110 as the offered odds and −110 as fair — the calculator shows the implied edge, the full Kelly wager, and your chosen fractional wager for the bankroll you entered.

Not sure what fair should be? Use the Devig Calculator first to derive fair odds from a sharp book, then bring that number back here.

For +EV bets surfaced by DawBets, you don't need to devig manually — the feed derives fair prices from sharp-book consensus and shows the Kelly-sized wager on every card automatically.

Frequently asked questions