Calculate the mathematically optimal bet size to maximise long-term bankroll growth without risking ruin.
The Kelly Criterion is a formula for determining the optimal bet size to maximise the long-term growth of your bankroll. It was developed by John L. Kelly Jr. in 1956 and is widely used by professional bettors and investors.
Formula: f = (bp - q) / b where b = decimal odds minus 1, p = probability of winning, q = probability of losing.
Full Kelly maximises growth rate mathematically, but requires perfect probability estimates. In practice, our estimates are never perfect. Half Kelly achieves ~75% of the growth rate with significantly lower variance and risk of ruin — it's the professional standard.
A negative Kelly value means the bet has no edge — you should not bet at all. This is the most important output: it tells you when to pass.