What is Kelly Criterion?
The bet-sizing formula that maximises long-run bankroll growth, given an edge and a price.
Also known as: kelly, kelly fraction
Kelly is the answer to 'how much should I bet?'. It is the unique fraction of bankroll that maximises log growth: bet too much and ruin is a real outcome; bet too little and growth is too slow. Full Kelly is mathematically optimal but extremely volatile in practice, so most professional bettors size at half Kelly or quarter Kelly to soften variance.
Example
Decimal 2.10, your win probability 55%. b = 1.10, p = 0.55, q = 0.45. f* = (1.10 × 0.55 − 0.45) / 1.10 = 0.1409 → 14.1% of bankroll at full Kelly.
Related terms
Expected value (EV) is the average profit or loss a bet pays per dollar staked if you repeated it under the same odds and probability forever.
The dedicated pool of money a bettor uses to place wagers, kept separate from living expenses.
The natural fluctuation of results around expected value — the reason a +EV strategy can still lose for weeks.
See kelly criterion applied to a real slate
NotaSportsGuru runs the math behind every published leg — Parlay of the Day, player props, match lines — with the model’s expected value and edge on every line.