Bankroll Management in Daily Fantasy Sports
When it comes to daily fantasy sports, many people equate long-term with success with the ability to make great lineup(s). They are right in a sense. If you don’t make great lineups, you simply aren’t going to win on a regular basis. But there is also another part of the equation for successful daily fantasy players: bankroll management. And like the ability to build good lineups, you are unlikely to be successful if you don’t practice good fantasy sports bankroll management.
The Basics of Bankroll Management
To practice good bankroll management in daily fantasy sports, you must first determine two things: what your bankroll is and what your plan is for that bankroll.
To put it simply, your bankroll is the amount of money you are willing to put into daily fantasy sports. For some people, that will be whatever they have in their account on a specific site. If they lose that, they are done with daily fantasy sports. So for a person in that scenario, their bankroll is whatever their account balance is.
But if you are willing to deposit $10, $100 or $X if your account balance hits zero, then your true bankroll is more than your account balance. It is the total you are willing to lose. So if you have $50 in your account on FanDuel and are willing to deposit $100 more if needed, your bankroll is $150.
Once you have determined your daily fantasy sports bankroll, you must determine your daily plan. Consistency is key here. You want to be playing the same percentage of your bankroll every day. I will get into the math on why this the case later on this article. But the whole point of bankroll management is to help deal with the volatility of DFS. As you probably know already, no one wins every night. But by using proper bankroll management and sticking with a consistent percentage (instead of a consistent dollar amount), you can survive long stretches of losing when they inevitably occur.
The standard percentage that you should play depends on a lot of things. For most people, I would say it ranges from 1%-10% of their bankroll in play on a given day. But this can be adjusted based on sport, game types and personal preference.
For example, if you are playing mostly Guaranteed Prize Pools (GPPs), then you are going to want to be on the lower end of the spectrum. GPPs carry the most variance and even the best players will have nights where they win absolutely nothing. On the other hand, if you are strictly a cash game player, it might make sense to be on the higher end of the spectrum for a few reasons. Even on bad nights, you will still likely win a few head-to-head or 50/50 games, avoiding a complete 0-for and because the risk/reward environment of cash games means that you must play a lot to win a lot. Each dollar only returns $1.80, which is must different than GPP where a single dollar can return over $1,000.
My advice is to establish a daily percentage of your bankroll that you plan to put in play each day. And then also come up with a breakdown of how to allocate that: X% in H2Hs, Y% for 3-man leagues, Z% for GPPs. And those allocations can be based on the game types your like and are successful at.
Daily Fantasy Sports Bankroll Management in Action
This is the worst case scenario, but still one worth looking at. Two players both start with a $100 bankroll. The player on the left decides to play a certain percentage of his bankroll each day (10%). The player on the right decides to play a certain dollar amount every day ($10). They both proceed to lose every day.
The player on the right goes broke in ten days. The player on the right loses for 25 straight days and still has money left in his account!
Now obviously 25 straight days of losing is probably a red flag. But I use this example to show you how effective proper bankroll management is at limiting losses during a losing streak.
The other part I like about the consistent % approach is that it allows you to sensibly raise your play as you begin to win more. A few days of winning might cause the player on the right to get overly confident and decided to play $20 or even $50 a day. The player on the left will not have to worry about how much he should ramp up his play. That decision will be made for him. If he wins $50 the first day, his account balance is now $150. The next day, he plays 10% of that: $15. And he does this every day, whether he won or lost the day before.
One of the reasons bankroll management is hard for people is because of the urge to win it all back in one day. People feel they are “due” for a win after a few days of losing and they don’t want to “waste” a great lineup playing only 10% of their reduced bankroll. They want to win multiple days of losses back and then some.
The problem with that is that we don’t know when our winning days will come. A good player might have years of data that tell him he will win 70% of his 50/50s. If he knew when those 30% days were coming, he wouldn’t need bankroll management. But he couldn’t possibly know that. I have been extremely confident in lineups that tanked and nervous about lineups that have done well and I am sure most players can relate to that. And that is really the key to bankroll management in daily fantasy sports. Using it properly guarantees profit at the end of the year if your win rate is higher than the threshold for that game type. If you don’t use proper fantasy sports bankroll management, you are left hoping that your winning days coincide with your heavy volume days. It could work, but you are pretty much banking on luck and the downside is no/limited profit (or even taking a loss for the year), despite an elite win rate.
If money isn’t an object to you and you want to go nuts chasing big tournament payouts, then bankroll management doesn’t matter. But if you are working with a set budget for DFS spending, bankroll management is absolutely essential, whether you are trying to grind out a profit in cash games or playing exclusively in tournaments, trying to hit a big one. Either way, proper daily fantasy sports bankroll management will keep you in the game longer, allowing you more chances to have that huge night.
Start building your bankroll on FanDuel today!