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Sean Holler | Archive | Email  

DFS University: Beginners Bankroll Management

Chapter 1- The Importance of Bankroll

Originally, I wrote this big sexy article on bankroll management and all the things we could learn from its connection to the casino. It had funny pictures from The Hangover, Rainman references, and tons of cool advice. I personally found it riveting, but after showing my friends (who are beginner DFS players) and getting two blank looks- I realized two things. First, I wrote the article on way too much Adderall. It looked like the chalkboard in Good Will Hunting. Second, it was too theoretical, and not very helpful for a beginner DFS player in understanding the practical importance of bankroll. So I went back to the drawing board. As they say, if you can’t explain it to a six-year-old, then you don’t understand it well enough yourself. And the random six-year-old I tried to explain this to on Adderall for a second opinion, really hit that point home. So let’s try again.

Success in gambling, no matter the game, is tied to two factors: perfect strategy and bankroll management. The reality is more people actually excel at perfect strategy than the simple task of managing a bankroll. To illustrate the importance of bankroll we are going to use a player named John. He is a 60% winner in 50/50 or cash games, and is thus a perfect example. He was also the first friend to tell me he didn’t get it. So if he doesn’t get the importance of bankroll management after seeing charts with his name on them, then we can’t be friends anymore.

If you are a 60 percent average winner in cash games, it is unlikely you win at 60 percent every single week. Some weeks you win 80% of your games, other weeks you maybe win 40 percent. Take a look at the charts below. In chart 1, John makes bets with his gut, often riding the highs and scaling back in the lows. In chart 2, John uses proper bankroll management. If you are DFS beginner, I think you’re going to like what you see.

 Bankroll from the Gut
Week Bet Size % of BR Win % Winnings New BR
1 $100 10% 60% $120 $1,020
2 $102 10% 80% $163 $1,081
3 $108 10% 80% $172 $1,145
4 $115 20% 80% $184 $1,214
5 $365 30% 60% $438 $1,287
6 $515 40% 40% $412 $1,184
7 $236 20% 40% $188 $1,136
8 $227 20% 40% $181 $1,090
Totals 60% avg $90

Let’s walk through chart 1. He begins with 10% of his total $1000 bankroll, great work so far. However, after having a few strong weeks, he falls victim to the hot hand fallacy and begins to increase his bet percentage. In Week 4 he feels like a genius. He increased his bet and he hit… cold beers all around. In Week 5, he increases it again, after all, it worked really well last week. And even though the return is less than the previous weeks, he still wins! In Week 6 he goes for gold. He feels a big win, he feels it deep down in his plums. Alas, he loses and wipes away a big chunk of profit. John quickly realizes he got ahead of himself and tapers down his bets. At the end of eight weeks, he has made $90.

Now let’s take a look at chart 2. John’s a machine, a terminator, a border security agent. He has no emotion, he isn’t moved by wins or losses and he doesn’t believe that you’re going to Sasquatch music festival with no drugs in the car. With this strategy you can see that by maintaining his strong win percentage, and also managing his bankroll, he has nearly doubled his profits in the same amount of time.

 Proper Bankroll Management
Week Bet Size % of BR Win % Winnings New BR
1 $100 10% 60% $120 $1,020
2 $102 10% 80% $163 $1,081
3 $108 10% 80% $172 $1,145
4 $115 10% 80% $184 $1,214
5 $121 10% 60% $145 $1,238
6 $124 10% 40% $99 $1,213
7 $121 10% 40% $96 $1,188
8 $118 10% 40% $94 $1,164
Totals 60% avg $164

Chapter 2 - Initial Bankroll Deposit into your Fanduel/ Draftkings Account

First, you need to decide how much you want to risk. The key here is to deposit an amount that would not affect your quality of life. I call it the ticket effect. Imagine you just got a speeding ticket. What amount on that ticket would ruin your month and possibly compromise your lifestyle? Whatever that amount is, start with that. Some people also suggest starting with no more than 5% of your monthly salary. If you earn $6000 per month, then $300 is your entry point. Oddly enough I find this usually comes out to the same speeding ticket number for most people. There is no hard and fast rule. This is known as your bankroll. You do not bet your whole bankroll weekly, you bet a percentage of it. This strategy will help you ride through the lows and highs.

Chapter 3 - Amount of Bankroll in Play Each Week

We will not play any more than 10-20% of our “parking ticket” bankroll per week. Whatever number you choose, be consistent. This is a multi-year strategy. There is always next year. Do not bounce from 10% to 20% to 40% based on recent wins and losses as you see in chart 1 above. Some say that because the NFL season is only 16 games, a larger percentage such as 20% should be placed on the table each week. I do not agree. The NFL season is 16 games, but your career as a sports gambler, if done correctly, could be however many years you would like it to be. If you plan to be a football and DFS fan for ten years, extend your charts to 160 weeks (I don’t advise playing Week 17, the risk is too high), then take a look at the power of compounding. Bankroll suicide happens when one bounces their amount in play on gut feelings, and takes a short term view. Don’t be that guy.

Chapter 4 - Games to Choose

We want to play our bankroll allowance in games that give us the best chance of winning consistently, and we want to avoid games that have the odds stacked against us. Therefore we are going to build our bankroll first using 50/50 and Head-to-Head games. This gives us the best possible chance to win- week in, week out, using consistent, low variance lineups. We are also going to play large-payout tournaments, with only a small investment.

More precisely, with our weekly bankroll allowance, we are going to play 80/90% cash games and 20/10% tournaments. The probability of winning a GPP tournament is incredibly low, however the average player cannot maintain a 60% win percentage and hitting a GPP tournament drastically improves your total ROI. Some players are better at finding success in tournaments, some are better at excelling in 50/50 games. Play a safer ratio first while you find out what sort of player you are, and then switch to a more custom strategy when you are ready.

Chapter 5 - Buy-in to Choose

We want diversification, and we also want weak opponents. Play the largest number of low entry fee cash games that your 80/90% cash game bank roll allowance will allow. Newer and less skilled players typically play here; it will also increase diversification. If you have $200 in play for example, we ideally want 200 $1 contests. You will run out of contests however, at which point it is okay to move $2 games. At a certain point your bankroll will be so large that you’ll need to change your entry strategy, targeting $5-10 games. A good rule of thumb is you want each game to represent no more than 5% of your weekly bankroll allowance.

Chapter 6 - Wait! But How Many Lineups?

Stay tuned for more lessons that I have trouble explaining to six-year-olds.