There have been countless posts in the Think Tank regarding the virtues of Kelly staking versus flat betting. Most naysayers of the Kelly Criterion are convinced that inaccurate edge estimation creates a dangerous environment for Kelly staking. Because of this, they insist that flat betting is a more suitable alternative for sports betting staking. To address these concerns, along with a personal aversion to the constant rehashing of this topic, I've provided an Excel simulator that allows you to see the differences yourself.

The simulator randomly chooses a line between the maximum line and minimum line settings (max = highest implied win probability). It then applies a randomly chosen edge between the maximum and minimum edge percentages. This is simply a representation of your estimated edge for the wager. Your estimated win percentage is then derived from the line you would be betting and your estimated edge for the wager. An error in your estimated edge is introduced (-10% > edge error > 10%). This is also randomly chosen between the maximum and minimum edge estimation error settings. The error is then subtracted from your edge and an actual win percentage is derived. The simulator then determines whether the play is a win or loss based on the actual win percentage.

Some other settings:

Plays: Self-explanatory I hope. (The number of plays that the simulator runs.)

Kelly Multiplier: The fraction of Kelly that you choose to simulate. This can range from anywhere between 0 and 8.

Flat Betting Percentage: The percent of your bankroll that is flat bet. This is the amount bet TO WIN.

Minimum Bet: The minimum bet that can be placed. If the wager that Kelly or flat betting attempts to place is smaller than this, the bet will be set to zero. Keep this in mind when setting your edges, Kelly multiplier, and starting bankroll. Small edges may not be bet with Kelly where they might with flat betting in certain scenarios.

The simulator also lists each individual flat/Kelly wager and the respective running bankrolls.

What you'll likely find is that when there is an equal chance of your estimated edge being either higher or lower than the actual edge, it tends to even out over time and Kelly remains far superior to flat betting. Only when flat betting approaches the average Kelly wager, does it come close to competing.

When the sample underperforms against the REAL win percentage, Kelly does moderately more poorly than flat betting. However, this is made up and then some when the win percentage regresses to the mean.

And finally, when you think you have an edge on the majority of your wagers but you don't, full Kelly does moderately poorer than flat betting. It's certainly NOT as treacherous as many would have you think. However, half Kelly and other variants show similar results to flat betting. But let's face it, if you THINK you have an edge but really don't, no staking system is going to make you money over the long haul.

In any case, you can come to your own conclusions with this simulator. And any time that the question of flat betting versus the Kelly Criterion is posed, hopefully people will be pointed to this simulator rather than rehashing the topic ad-nauseum once again.