The Kelly Criterion Explained
The Kelly criterion sizes your stake to your edge for optimal long-term growth. Here's how it works, and why most bettors should use a fraction of it.
The Kelly criterion is a mathematical staking formula that sizes each bet according to your estimated edge, maximising long-term bankroll growth. It's powerful but unforgiving of overconfidence. This guide explains it simply, extending staking plans compared.
What Kelly does
Kelly tells you what fraction of your bankroll to stake based on the odds and your estimated probability of winning. Bigger edges mean bigger stakes; no edge means no bet.
In theory it delivers the fastest sustainable bankroll growth.
The formula in plain terms
The stake fraction rises with your edge (how much the true probability beats the implied probability) and adjusts for the odds. When you have no edge, Kelly says stake nothing.
Our staking calculator can work out Kelly stakes for you.
Why use fractional Kelly
Full Kelly is volatile and assumes you know your edge exactly — which you don't. Most bettors use a fraction (half or quarter Kelly) to cut the swings and the risk of overestimating their edge.
Overestimating your edge with full Kelly can cause brutal drawdowns.
Kelly's big caveat
Kelly is only as good as your probability estimates, and overconfidence makes people overbet. If you can't reliably estimate your edge, a simple percentage plan is safer.
Treat it as a tool for disciplined, analytical bettors, not a shortcut to riches.
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Last reviewed 18 August 2026 · Written and fact-checked against our review policy and scoring methodology.
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