Bankroll Management: The Martingale Sports Betting System

The Martingale sports betting system is a money management formula that has you double your wager at every loss.   Many sports handicappers use this money management system whether subconsciously or not.  I have previously subscribed to handicapping services that strongly advocate this technique – whether that be to help their clients regain losses and bank more profits, or just so they can claim their subscribers are all in the positive, I do not know.

Regardless, the Martingale sports betting system is widely used, will always produce profits (as long as the losing streak you can undergo does not last forever, and as long as your bankroll is large enough to withstand longer losing streaks).

What Is the Martingale Sports Betting System?

So, what is the Martingale sports betting system?  Well, I have previously written an article on the Paroli betting system (you can read that article here).  The Paroli betting system is considered the polar opposite of the Martingale system.  So much so that the Paroli betting system is often referred to as a “reverse Martingale” or an “anti-Martingale” system.

The Martingale sports betting system is, simply put, a technique that involves doubling a losing wager until a win.  Wagering on a simple coin flip, as an example, say you bet $10 on tails (as the saying goes, “tails never fails”).  If that wager is a winning one, great, now bank the profit and place another $10 wager.  If you, however, end up on the losing side of that coin flip – if following the Martingale system – you would next wager $20 on the next coin flip.  If you win, you recoup your losses and also gain you original wager back.  If you are again on the losing side of it, next wager would be $40.  And so on and so forth, until your wager is a successful one.  When that occurs, you would simply replenish your bank roll and also pocket the $10 gained.

Where Does the Martingale System Originate From?

The Martingale sports betting system is said to have been invented in the 18^th century by a London based casino owner named John Henry Martindale.  Although the spelling of the MartinGale system does differ slightly from that of John MartinDale, this is widely believed true.

My conspiracy theory loving friend would take the statement above and say, “hey, why would a casino owner invent a sure fire way to beat casino games”?  Exactly I think, so digging a little deeper…

In a world of phony money and back testing, the Martingale system does appear to be a winning bankroll strategy for profitable wagers.  However, when putting up real money, even if you have an unlimited amount of it – which nobody does, or at least I do not know anybody who does –  the idea of placing an exceedingly large wager in order to gain your original, seemingly more and more minuscule, starting wager seems a bit much.

On paper, yes, it is crazy but can make sense.  However, in reality, many would not feel comfortable sacrificing an exceedingly large wager in order to gain your original smaller wagered amount.  Risk versus reward really and, no matter how confident you are in your handicapping selection, the second you feel uncomfortable in the wager amount – this will not translate to a solid wager.

Let us take a medium-sixed losing streak of 5 losses in a row to further evaluate the risk versus reward aspect of the Martingale sports betting system.

1^st wager $10 to win $10 or lose $10.  Result is a loss.  Bankroll lighter by $10.

2^nd wager $20 to win profit of $10 (50% possible return).  Result is a loss.  Bankroll down total of $30.

3^rd wager $40 to win profit of $10 (25% possible return).  Result is a loss.  Bankroll down total of $70.

4^th wager $80 to win profit of $10 (12.5% possible return).  Result is a loss.  Bankroll down total of $150.

5^th wager $160 to win profit of $10 (6.25% possible return).  Result is a loss.  Bankroll down total of $310.

Are you willing to make a 6^th wager?  No matter how advanced your handicapping strategy is and how well it has done in back testing scenarios and maybe when implemented in the market already, it is not completely crazy to think your system will have a streak of 6 losing bets in a row.

If you do chose to place another wager, based on the Martingale sports betting system, you will need to put up $320 with the chance to gain your $10 back (return of only 3.125%).

Positive vs Negatives of the Martingale Sports Betting System

So what are some positives versus negatives with the martingale approach?

On the positive side:

• For someone with an unlimited bankroll and nerves of steel, it is near impossible to lose over the long haul.
• There is no need to memorize more complicated equations, such as the Kelly Criterion.

On the negative side:

• For most of us, with a limited bankroll, the Martingale system can essentially bankrupt your entire bankroll with only a losing streak of medium length.
• The amount wagered per contest can grow considerably with even a medium length unprofitable streak.
• The longer you wager on sporting events, the greater the chance your system catches one or two or more of those unprofitable streaks.

Conclusion

While many online handicappers that offer sports betting picks may advocate the use of the Martingale system to boost the perception of how profitable they are, you should first see the picks offered over a historical period of time to see whether there was a streak which would make you feel uncomfortable wagering that much for such a little return.

I, personally, would not feel comfortable putting so much into developing a solid handicapping system (devising a plan, back testing, re-arranging the parameters, back testing some more) and then know that all you worked for could be flushed down the toilet with a single and inevitable, medium-sized losing streak.

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