Originally posted on 12/25/2011:

Nothing wrong with betting large amounts on a few games, versus smaller amounts on many games, as long as you don't mind going bankrupt a lot.

In statistics, large numbers are your friend. The more wagers you make, the greater the likelihood that your winnings (or losses) will correspond exactly to your edge. If you make a small number of large bets and end up losing your bankroll, you won't know if your bets are negative EV or if you just had a bad weekend. If you make a large number of small bets and see your bankroll steadily diminish, you know you're doing something wrong. The same works for winnings. My first four bets on games, each with ridiculously high amounts, all won. Essentially, I had tossed heads four times in a row. No skill, just luck. It could have gone the other way just as easily. Luckily, my Inner Statistician told me this.

For those looking for a deeper explanation, check out the Central Limit Theorem. The idea is that the more often you sample a distribution (i.e., place a bet and see what happens), the closer you'll get to finding your edge. It also means that more small bets has less overall variance than a few large bets. Suppose you can pick winners with 55% accuracy. What's more likely, putting all your money on one game and losing it all, or distributing your money across ten games and losing all ten of them? More bets = less variance = less chance of losing everything on one really bad weekend.