Lynsey Thompson

Let’s cut to the chase. Reputable online casinos are not rigged in any way.

In fact, there is a whole framework in place to ensure that online <a href="https://outplayed.com/blog/ultimate-guide-to-casinos">casinos</a> conduct themselves to exceptionally high standards.

However, there are a growing number of unregulated online casinos that work outside of this framework which you should be aware of.

At one point or another, most online gamblers have probably wondered if casino games are rigged, usually only after losing though. I’ve certainly never pondered whether a casino is rigged after hitting a big win.

It’s an understandable question to ask when so much about online casinos is unknown.

The remote nature of these sites leads to natural suspicion about whether they can be trusted and if they are being held accountable in any way.

To understand more about how online casinos work, what regulations are in place, how you can protect yourself, what to do if you have a dispute, and even how you can turn the casino odds in your favour, then read on.

When talking about casinos, there needs to be a distinction between whether the casino is ‘rigged’ in terms of unfair practices or whether this refers to the natural house edge that all casinos have.

We’ve all heard of the saying ‘the house always wins’ and it's true that if you take the total incomings and outgoings of any casino, online or not, they will show the casino making a profit.

It’s not a coincidence, it’s not a scam, it’s how they stay in business. House edge is essential for casinos to operate. Without it, they’d effectively be gambling themselves.

House edge is a mathematically calculated percentage that a casino expects to keep from each hand or spin, given normal patterns of play.

If we take European Roulette as an example, which has 36 numbers and a single zero making 37 outcomes in total. There is a house edge of 2.70% built into every bet on this game. It’s just maths.

Players betting on black or red don’t get a 50% chance of winning as there is also a green zero. Therefore the odds are more like 48.6% on either colour. Meanwhile, players who bet on the exact number might get a 35 to 1 return even though the actual odds are 37 to 1. The difference between these numbers is the house edge.

Because of house edge, the odds are always going to favour the casino if you play over a long period of time betting the same stake. It’s not rigged as such, it's programmed and is fully transparent. Of course, it's still possible to win big on games with a house edge, otherwise, why would you even play them at all?

The point is, though, that house edge is not a scam or a con, it’s a characteristic of all casino games and players should make themselves aware of the rules.

There are ways of improving your online casino returns though by playing low house edge games such as blackjack. You can also use strategies and potentially introduce some advantage casino play too, which we’ll go into later.

When it comes to fairness in online games, RTP and RNG are two abbreviations that should help put your mind at rest. These ensure that online games are operated in a non-biased way and pay out the correct percentage of winnings.

All casino games have an RTP which is the Return to Player percentage. It is given as a figure out of 100 and most games will have an RTP of 90 - 97%.

In theory, if a game has an RTP of 96% then players can expect to get £96 back for every £100 spent on average. Of course, this data is taken over a huge sample and you could still be one of the unlucky ones that leave with nothing. However, it can be used as a guide for how well a game pays.

The good news for people who are reluctant to trust online casinos is that RTP regulates how much a game pays out. While online casinos can adjust the RTP somewhat for their site (which is why some slots games will have different advertised RTPs on different sites), once set, the RTP is built-in to the games’ software and cannot be rigged.

The second abbreviation is RNG, which stands for Random Number Generator. This is the system that all casinos use in most slot games, both online and offline.

RNG guarantees that each game round is not predetermined and is, in fact, independent.

When an online casino game is created, the software developer adds an RNG. It is then tested in an independent audit lab to ensure its effectiveness.

It means that every spin on an online casino slot machine is completely random and independent, and therefore cannot be altered or rigged.

Incidentally, it is the RNG algorithm that determines the game's RTP. When being tested, they run a programme that does hundreds of thousands of spins in a short period of time and therefore gives them the RTP figure for each game.

The easiest way to tell if an online casino is legitimate and not rigged is to check that they are licensed. In the UK, this means that they are fully registered with the <a href="https://www.gamblingcommission.gov.uk/public-register/businesses/full">UK Gambling Commission</a> (UKGC).

Licenced online casinos will usually display the UK Gambling Commission logo on their websites as proof of their trustworthiness and reliability. This is typically located on the footer of their website:

But if you want to be really thorough, you can go to the UK Gambling Commission website and click on ‘Search the Business Register’ to check them out for yourself. Just enter the casino name, press search, and it will confirm whether they are registered or not.

In order to get a licence from the UKGC you need to abide by the Licence Conditions and Codes of Practice (LCCP).

It’s far too long to go into in detail here, but as well as looking after player confidentiality, security and safety, the regulations state that online casinos have to provide gambling services and games that are fair. This is monitored in three key ways:

Online casinos are required to have their software and gameplay tested in line with the UKGC testing strategy

All gambling products must have been tested by an approved test house before they are released to the market

Online gambling games cannot be made available to players located in Great Britain unless sufficient testing has been carried out

Once a game has gone live, gambling businesses are required to check the performance of the games they offer. This is to make sure that the products are fair and achieve the designed Return To Player (RTP)

The UKGC has the power to carry out compliance checks, and audits of online casinos. If they feel there has been any wrongdoing, they can use enforcement powers to prosecute or fine for breach of licence.

This isn’t just lip service either, in the last year the UKGC have dealt out some heavy fines to very well-known gambling companies in the UK including Betfred and William Hill for anti-money laundering failures. Plus, they have suspended several gaming licences in the last year, so they mean business!

All licensed online casinos must submit detailed annual regulatory returns showing their full financial position in the past year.

This includes its gross gambling yield (GGY) which includes not only the total income but also the outgoings in the form of winnings. Interestingly, casinos also have to indicate how much <a href="https://outplayed.com/casino-bonus">bonus offers</a>, <a href="https://outplayed.com/free-bets">free bets</a> and loyalty schemes have affected their GGY, so all activity is intrinsically evaluated.

To summarise, if the online casino you’re playing in is licensed with the UKGC, it's highly unlikely to be rigged in any way. But if you have suspicions, then there are options you can take which we’ll discuss below.

Now that we’ve covered the regulations surrounding UKGC licensed online casinos, let’s take a look at the others.

This is where you’ll find the majority of accusations about online casinos being rigged, and it’s understandable given there is very little framework in place.

Unregulated online casinos still need a licence to offer gambling services in theory. However, you will find some don’t have one, and are therefore illegal, while some have a kind of wishy washy one that isn’t really worth the paper it's written on.

Although we can’t say for certain whether these online casinos are rigged or not, the issue is there is no governing body to ensure they aren’t. All casinos should be using the same technology and controls to ensure games are fair. Unfortunately, there is no way of knowing if this is the case.

The games aren’t the only issue either. There are also no regulations in terms of player confidentiality, payment security or responsible gambling tools, so they can pose a potential risk.

If you want to avoid the uncertainty of an unregulated casino, then do your research. Check the UKGC website, look for player reviews, or follow the advice of companies such as Outplayed, who will only ever recommend trusted online casinos.

Taking into account everything discussed above - RNG, RTP, House Edge and strict regulations by the UKCG, then yes, you can trust online casinos, as long as they are properly licensed.

As well as the fairness of the games, online casinos are also heavily regulated in terms of player safety and security, payment encryption and safer gambling tools. They are held accountable for it all and the UK Gambling Commission certainly aren’t afraid to act should they fall out of line.

Online casinos offer a full casino experience but with the convenience of playing from anywhere and at any time. If you stick to reputable online casinos, then you have just as much chance of winning as you would in a casino down the road.

In fact, in some cases, the RTP of online games is higher than offline, due to the lower overheads and costs associated with an online set up.

It is possible to win big in an online casino. I have had some decent wins personally, the biggest being over £800, and I know people who have won a lot more. After all, if online casinos only ever created losers, they’d be out of business pretty sharpish!

Obviously, though, you can lose too, just as you can with real life casinos. The only main difference between the two is whether you want to physically go to a casino or whether you prefer to play remotely.

What To Do If You Have A Dispute With An Online Casino?

If, at any point, you do suspect something fishy is going on with an online casino, or you have issues claiming your winnings, then there are a few paths you can take.

Every online casino must display a complaints procedure on its website, so this is the first step. If it's not visible, contact them and ask them to send a copy of their complaints procedure and then follow the process.

When making the complaint, give them as much information as possible, dates, events, and amounts of money. Make sure you keep a record of everything you send them.

The casino has 8 weeks to resolve your complaint and give you an outcome. They will also advise you what to do if you’re not satisfied with the result.

If you are still unhappy with the outcome, then you may be able to escalate your complaint to an Alternative Dispute Resolution (ADR) provider.

You cannot take your complaint to an ADR without first going through the casino’s complaint process.

ADR providers are independent adjudicators who will look at all of the facts and make a final ruling. The biggest ADR provider in the UK betting industry is IBAS ((Independent Betting Adjudication Service) although the specific casino you have an issue with may use a different regulator.

If you go through an ADR, the process is free but can take up to six weeks.

Another option you can take is to go through the Small Claims Court if you are confident you have a strong legal case.

This is the fastest way to resolve a dispute but you do have to pay fees upfront to start proceedings. If you win, the fees are then refunded.

For casinos with a registered office in England or Wales you can use <a href="https://www.moneyclaim.gov.uk/web/mcol/welcome">Money Claim Online</a>. Further information about the small claims process and fees can be found at <a href="https://www.moneysavingexpert.com/reclaim/small-claims-court/">Money Saving Expert</a>.

We have spent all of this time so far talking about how casinos could potentially take advantage of players. However, we haven’t yet discussed the possibility of players having the advantage themselves.

If you haven’t already heard of it, casino advantage play is a <a href="https://outplayed.com/what-is-matched-betting">Matched Betting</a> technique which looks to tip the odds in the favour of the player.

This is done by utilising the bonus offers and promotions that online casinos give to new and existing players such as welcome offers, matched deposits, or <a href="https://outplayed.com/free-spins">free spins</a>.

Casino advantage play uses various techniques and strategies to see if the offer provides something referred to as "+EV", which is positive <a href="https://outplayed.com/blog/what-is-expected-value">expected value</a> for the player.

Say, for example, an online casino is offering a ‘Wager £10 and get 20 free spins’ promotion.

Of course, any player can take up this offer, wager £10 on a game and claim the free spins in the hope that it will end in a profit.

How&nbsp;Matched Betting&nbsp;works is that the offer is first assessed as to whether or not it can provide a positive EV and, if so, how best to play it to give the biggest possible return for the player.

Depending on the offer, some bonuses can result in guaranteed profits, while others give a high chance of a positive outcome in the long run for the player if played correctly.

<a href="https://outplayed.com/">Outplayed</a> is one such company that provides guidance to online casino players on how&nbsp;Matched Betting&nbsp;works and gives access to all the necessary instructions and tools to do it.

If you want to find out more about&nbsp;casino advantage play then check out <a href="https://outplayed.com/blog/matched-betting-casino-offers-explained-in-a-nutshell">our guide</a>.

Lynsey

Are Online Casinos Rigged?

Stephanie Sorrell

In psychology and philosophy, Gambler’s Fallacy describes the common, mistaken belief that if a particular chance event has happened less than would have been expected, it will be more likely to happen in the future.

Which sounds quite complicated. So, as an example to illustrate the idea, imagine you’ve flipped a coin nine times, and it’s been tails every single time so far. Surely the streak is bound to end soon, right? If you’d call heads, reasoning that it’s more likely to fall on heads after such a long run of tails, you’ve fallen prey to gambler’s fallacy.

It’s an incredibly common psychological phenomenon, partly because human brains are programmed to look for patterns in everything, including matters of pure chance. And over the course of history, gambler’s fallacy has been responsible for people losing truly vast amounts of money.

Read on to find out why humans are so susceptible to the fallacy, and how you can avoid falling for it.

A ‘fallacy’ is a philosophical term referring to a mistaken belief based on flawed reasoning - usually a belief that feels plausible or appears to be well-reasoned at first. Gambler’s fallacy can seem like common sense to a lot of people, and it can be difficult to convince them that it’s wrong, even when they understand the mathematics that underlies it.

In psychology, gambler’s fallacy has been studied extensively, and has been found to have effects far beyond the realm of gambling, with loan officers, umpires, stockbrokers and even judges at risk of making decisions influenced by this faulty reasoning.

It may seem obvious, but every coin toss - or other similar chance event - is completely independent of all other previous tosses of that coin. The chance of either heads or tails occurring will always be 50%, so long as it’s a fair coin.

This seems logical enough, but people run into trouble when unusually long strings of one result come along. We all know that if you toss a fair coin enough times, the results will average out to being 50% heads and 50% tails. So, if you’ve had an unusually long run of, say, heads, it seems like common sense that you’ll have to get tails, to balance things out.

But this principle works best for extremely large numbers. If you tossed a coin a million times, the results probably wouldn’t be far off 50/50 between heads and tails, and if you tossed it a billion times, they’d be closer still.

But that doesn’t translate to smaller numbers. If you toss a coin only ten times, you can’t expect it to come up heads five times and tails five times (although this is, of course, one of the possibilities). In reality, clusters happen all the time, and have no effect on the likelihood of the next toss having a particular outcome.

When you think about it, it seems clear that the coin can’t have any kind of memory of what’s gone before. Every time you toss a coin, you start from scratch with a 50% chance of heads or tails, no matter the previous results.

Gambler’s Fallacy is also known as the ‘Monte Carlo Fallacy’, thanks to a famous game of roulette from 1913, which featured an incredible run of black - 26 times in a row - and which took place at the Casino de Monte Carlo in Monaco.

After the first ten spins resulted in black, gamblers started to reason (incorrectly) that the ball was due to land on red, and began betting ever-increasing amounts of money accordingly. But the ball kept on landing on black, and gamblers’ losses kept mounting. By the time the streak finally came to an end, bettors had lost millions of francs - and the Monte Carlo casino, meanwhile, had made an absolute fortune.

Hot hand fallacy is what you might call the opposite of gambler’s fallacy. Hot hand fallacy refers to the belief that, if a gambler has been enjoying a run of good luck, they’re more likely to keep on winning. This can result in gamblers continuing to bet after winning significant amounts of money, believing that they’re bound to keep on winning - which is how many people end up losing all their winnings, and more.

Based on the same principle as gambler’s fallacy, this refers to what a person might assume about past events, having seen only recent ones. For example, if someone rolled a pair of dice and got three double sixes in a row, an observer might assume that they had been rolling the dice for some time, because the outcome of a series of three double sixes is so unlikely.

In some circumstances, someone can draw conclusions from the results of chance events without it being a case of gambler’s fallacy.

For example, if someone observes a series of coin tosses, notices that tails is coming up more frequently than heads, and concludes that the coin could be biased and thus more likely to fall on tails in the future, that would not be a case of gambler’s fallacy. Their conclusion is based on the actual evidence available, rather than a gut feeling about luck or chance.

They might well be wrong that the coin is biased, but because they are reasoning based on empirical evidence rather than an incorrect instinct, this wouldn’t be considered an example of gambler’s fallacy.

There are also gambling-related situations where the probabilities of events occurring aren’t independent of each other, and therefore where gambler’s fallacy cannot apply.

Take, for example, a game where you bet on the next card to be drawn from a pack of cards. If an ace is drawn from the pack, without being replaced, then the chances of an ace being drawn again are lower, because there are fewer aces remaining in the pack. This is the principle that gamblers use for card-counting in casino games like blackjack.

How Do Betting Sites Take Advantage Of Gambler’s Fallacy?

Although a betting site can’t explicitly lie to its customers to encourage them to keep betting - so they won’t say, ‘keep going, the ball’s sure to land on red next!’ - they can take advantage of gambler’s fallacy in more subtle ways.

For example, in games with random jackpot wins, they might indicate how long it’s been since the jackpot was last won to encourage gamblers to keep playing - even though, if the jackpot winner is determined entirely by chance, you’re no more likely to hit it when it’s been six months since the last win than when it was last won only a day ago.

And in slots games, if a gambler comes close to hitting a bonus, for example getting two out of three ‘scatter’ symbols, the final line will usually slow down drastically to build the gambler’s anticipation and hopes. This enhances the feeling of, ‘I was so close!’ and makes the gambler more likely to feel that hitting the bonus is just round the corner.

Non-Gambling Examples Of Gambler’s Fallacy

Although it’s called ‘gambler’s fallacy’, the phenomenon is by no means restricted to gamblers.

The financial industry can be particularly susceptible to gambler’s fallacy, with investors and traders frequently acting on the assumption that a certain stock must be ‘due’ to go up having been down previously, or vice versa. There will of course be other factors affecting the value of the stock, but financial decisions based purely on the idea that a trend in one direction must follow a trend in the other can have a dramatic impact on the world of finance.

People are also susceptible to gambler’s fallacy when it comes to predicting the gender of a child. If a couple has had several boys already, for example, they might expect to have a girl next. This phenomenon was described as long ago as 1796 by the French philosopher and mathematician Pierre-Simon Laplace.

He observed men who hoped for a son becoming extremely anxious when they noticed a larger number of boys than girls being born in a particular month, believing that the chances of their baby being a girl were greater, to balance out the boys that had come before.

Studies have also found that decision makers can be subject to gambler’s fallacy in some pretty high-powered situations. Asylum judges, for example, are less likely to approve an asylum claim if they have granted the two previous claims as well. In baseball, meanwhile, umpires are less likely to call a strike (when the ball was within the fair hitting zone for the batter, and the batter failed to hit it) if the previous two balls had been strikes.

How To Avoid Falling Prey To Gambler’s Fallacy

If you gamble regularly, it’s important to be aware of gambler’s fallacy to avoid being duped by it, but even if you stick to Matched Betting (which isn’t the same thing as gambling - to find out more check out our <a href="https://outplayed.com/what-is-matched-betting">guide to Matched Betting</a>) you still need to be conscious of it.

It’s surprisingly difficult to overcome the instinctive belief in gambler’s fallacy, even for people who understand the mathematics involved and the nature of probability.

Psychologists have found that the best way to resist the fallacy is to treat each event as if it is a beginning, rather than a continuation of prior events. For example, if as a matched bettor you’re given 10 free spins by a bookie, and don’t win on any of them, you might be tempted to keep trying with actual money, because surely you’re due a win after 10 successive failures.

However, as we’ve learnt in this article, this simply isn’t the case - your chances are no different from your very first spin, and you’d be much wiser not to risk your own money.

Similarly, if you place several matched bets and have a run of wins at the bookmaker, you might think it’s worth placing a couple of unmatched bets for real, as clearly you’re on a winning streak. But this would be an example of the hot hand fallacy, and again you’d be much wiser to stick to your usual Matched Betting, with its smaller, <a href="https://outplayed.com/blog/is-matched-betting-risk-free">guaranteed profits</a>.

Now that you understand how gambler’s fallacy works and why humans are so susceptible to it, you might feel confident that you won’t fall for it. However, that doesn’t mean you should allow yourself to become complacent.

It’s surprisingly difficult to identify one’s own flawed thinking, so, especially when Matched Betting or making any sort of financial decision, you should be careful to examine your own thoughts and instincts objectively.

It’s also a good idea to be open to criticism from others, because people are often much better at spotting fallacies in others than in themselves. If someone points out that your reasoning might be flawed, listen to them! They might not turn out to be right, but you’ll be better off for having taken the time to consider the way you’re thinking, and whether it’s as rational as you believe.

What Is Gambler's Fallacy?

Paul Trevor

A Forecast bet is another form of multiple bet that requires bettors to predict the top two finishers in an event.

It’s a very popular bet within the horse racing industry.

Predicting the top two finishers and their order is no easy task which is why the potential rewards from Forecast bets can be very substantial.

In this article, you’ll learn how a Forecast bet works, how to place one, the different Forecast <a href="https://outplayed.com/blog/types-of-bets">bet variations</a> and how to calculate potential returns.

By placing a Forecast bet , you are effectively placing two bets rolled into one. With a Straight Forecast, you need to bet on which horse will finish first and which one will finish second.&nbsp; A Forecast bet can only be placed on one race and can’t be spread across different races.

Similar to a <a href="https://outplayed.com/blog/what-is-a-tricast-bet">Tricast bet</a>, you only pay the total stake that you put on the Straight Forecast bet. Your stake doesn’t multiply as it would if you were to do a <a href="https://outplayed.com/blog/what-is-a-trixie-bet">Trixie bet</a>.

Forecast bets can be placed on any race that has a minimum of three runners.

If there are non-runners and there are less than three competitors, your Forecast bet will be voided.

Also, if there is only one competitor that finishes a race, no Forecast dividend will be declared.

Should this happen and you had the winner in your Forecast, your bet will settle as a winning single using a starting price.&nbsp; Any other Forecast bets will be void.

There are three main types of Forecast bets that are the most popular: Straight Forecast, Reverse Forecast and Combination Forecast.

There’s also other variations of Forecast bets available to bettors: Straight Forecast Double, Straight Forecast Treble, Reverse Forecast Double, Reverse Forecast Treble, Combination Forecast Double and Combination Forecast Treble.

These variations are more suited to experienced bettors so novice bettors should probably avoid pacing these until they are confident in what they are doing.

Let’s cover off the main Forecast Bets and then some of the less popular Forecast combinations:

The same as the Reverse Forecast Double but this time the total stake is multiplied by eight and there are eight permutations as follows:

Let’s have a look at the mechanics of the Forecast bets and how to place them at the bookies.

The Straight Forecast is one of the simpler multiple bets to place where you need to pick the first two finishers in the race, in the correct order.

Looking at the 4.40pm at Chepstow, you’ve done your research and the analysis suggests the clear favourite is going to be tough to beat.

However, the form of another horse catches your eye and it has one of your favourite jockeys riding it so you’re quite confident it will be in the mix at the end of the race.

Based on your research, you decide to back Hey Big Spender at odds of 2.75 (7/4) to win and Desert Footsteps at odds of 7 (6/1) to finish second. So, how do you place the bet.

First thing to do is find the Forecast market. With Bet365 there is a separate tab for Forecast bets (highlighted below).

Simply then click on your first and second choices and click Add to Bet Slip.

Once you have clicked Add to Bet Slip, you are shown the below details where you enter your stake and then Place Bet.&nbsp; It’s at this point that you’ll see the potential returns based on your stake.

It’s worth noting that the layout can differ from bookie to bookie but the Forecast bet option will be there.&nbsp; Some bookies will show the normal racecard and when you pick two selections, the Forecast option appears in the betslip.

Based on the same race, with a Reverse Forecast bet you are still choosing Hey Big Spender and Desert Footsteps.&nbsp; This time you are choosing them to both finish in the top two but in either order.

So, this time instead of choosing first and second, you need to click both horses in the ‘Any’ column and click Add to Bet Slip as before.

After you click Add to Bet Slip, you will notice there is a slight difference to the layout.

First thing you will notice is your stake is doubled and there are no odds showing. If you click on the ‘Show Odds’ link highlighted, you will be given a breakdown of your potential returns from the two winning combinations available.

Please Note – The bet slip says Combination Forecast.&nbsp; Whilst technically it is a bet with a combination, it is actually a Reverse Forecast.&nbsp; Most bookies will display it as a Reverse Forecast in their betslips.

Sticking with the 4.40pm Chepstow race, how do you place a Combination Forecast bet? Pretty much the same as the Reverse Forecast but this time you are going to choose three horses.

Remember though, this time your stakes are multiplied by six due to the combination of bets you are covering. You’ll need 2 out of three horses selected to finish first and second in any order to get any returns.

As with the Reverse Forecast, by clicking on the ‘Show Odds’ link in your betslip, you are presented with details of what combinations can provide you with returns. These can be seen below:

This isn’t as straight forward as you might think as not all bookies offer fixed price odds on Forecast bets and those that do use computer generated algorithms.

A lot of them use the Starting Price (SP) which means any dividends aren’t declared until after the race finishes.

Therefore, bettors don’t know what returns they might expect if they’re successful.

This is often the case with some other multiple bet types and in particular, <a href="https://outplayed.com/blog/what-is-a-trixie-bet">Trixie Bet </a>calculations are seriously complex and computer generated.

You can learn a bit more about the SP in our <a href="https://outplayed.com/blog/what-does-sp-mean-in-horse-racing">Starting Price article</a>.

Whilst Bet365 are very good at providing odds so we can see our returns, it’s not always possible to know so let’s cover the basics of the three main forecast bets using our example from the 4.40pm at Chepstow:

Quite a few of the Bookies offer their own calculators for Forecast bets.&nbsp;

What Sports Can You Use A Forecast Bet On?

Forecast bets can be used in many sports but are mainly used in horse racing and greyhound racing.&nbsp; As mentioned, due to the size of the races with horses and the complexity of the maths, a lot of Forecast bets don’t offer fixed odds.&nbsp;

Other sports however, tend to offer fixed odds for Forecast and <a href="https://outplayed.com/blog/what-is-a-tricast-bet">Tricast bets</a>.&nbsp; Here’s some of the sports you can place Forecast bets on:

Advantages &amp; Disadvantages Of Forecast Bets

Forecast bets aren’t for the faint hearted.&nbsp; To stand any chance of success with them, you need to do some research and understand what you are doing.

They aren’t recommended for novice bettors.&nbsp; However, once you understand them, they can be a great source of fun and potentially very rewarding.

Whilst there are some professional gamblers who have success by targeting certain races for Forecast betting, they aren’t considered to be a reliable way to make long term profits.

This is evident in the high odds offered by the bookies to land a result.

What Is A Forecast Bet

Ollie Hickmore

Kelly criterion is&nbsp;a mathematical formula that gives a stake size that will maximise the expected growth rate of your bankroll.

When using methods such as the&nbsp;<a href="https://outplayed.com/what-is-matched-betting">Matched Betting strategy</a>, you'll be laying off your bookmaker bets at an exchange to often guarantee a profit from offers, hence the name Matched&nbsp;Betting.

Ordinarily there's rarely a need to think about how big your stakes should be.

After all, you're balancing it out with the exchange lay anyway, so your risk is minimal. Moreover, most of the offers where you're laying your bets will have a set stake size in order to qualify for the promotion (e.g. Bet £20 Get £10 Free Bet).

This all changes completely when you delve into the world of value betting.&nbsp;For example, if you go for a "No Lay" strategy for <a href="https://outplayed.com/blog/extra-place-offers">Extra Place offers</a>, or you know a bookmaker has a selection that is overpriced and you can't/won't lay it.

Here, since you're not balancing out your bets with an exchange lay, the amount you stake on the bet is very important. You don't want to stake so much that you risk rapidly losing your whole <a href="https://outplayed.com/blog/matched-betting-bankroll">betting bankroll</a> (and thus don't have the money to take advantage of future profitable bets). But at the same time, you don't want your bet sizing to be so small that you're not gaining as much value from your bets.

This is where the Kelly criterion comes in.&nbsp;It takes into account all the important things: the size of your bankroll, the payout if you win, the loss if you lose, and the probabilities of these outcomes happening.

Within the Settings of the <a href="https://outplayed.com/blog/extra-place-master">Extra Place Master&nbsp;</a>(when you have No Lay mode selected), you'll see the option to fill in your bankroll amount and also select Kelly staking.

And that's all the hard work done for you in terms of calculating how much you should stake!

Now when you load up the calculator for a selection, it'll give you the recommended stake based on your bankroll and all the other important information specific to that bet.

Before we go into how the Kelly stake amount is derived, it needs to be said that the stake the Kelly formula gives is often pretty brutal. That's to say that the stake that's optimal for growing your bankroll is bigger and therefore riskier than is really necessary.

This is why Outplayed's software defaults to fractional Kelly stakes. It simply takes the optimal stake that the Kelly formula would give and then divides it. The recommended amount is 0.25 (i.e. the stake that will be recommended by the software is a quarter of the optimal Kelly stake).

This will give a much more sensible and balanced stake amount.

So are you throwing away value by not betting with the fully optimal stake amount?

Well, yeah, some.. But the upside is you can stake a much smaller amount and still achieve a similar value in terms of bankroll growth rate. This means much calmer downswings to your bankroll and a much smaller chance of having the doomsday scenario of losing your entire bankroll.

Let's take a look at an example bet with the following info:

The Kelly Criterion maths (which we'll go into more detail with later) gives the optimal stake to maximise the expected bankroll growth as £62.50. This is the stake where the growth rate peaks on the graph below (the green point). It gives an expected bankroll growth rate of 0.74%.

The orange and yellow points show what happens to the growth rate if you go for a much smaller stake of £30 or £15. The £30 stake gives a growth rate of 0.55%, and the £15 stake gives 0.32%.

They do indeed lead to a lower average growth than a £62.50 stake, but are much less risky since they require a much smaller chunk of your bankroll.

The graph also shows that betting more than £62.50 in our example is completely redundant. The growth rate will only get further away from the maximum of 0.74%, and so you'll be taking on more risk for less reward.

Outplayed makes life nice and easy in terms of the <a href="https://outplayed.com/calculators/kelly-criterion-calculator">Kelly calculations</a>. But let's take more of an in depth look at how the stake amount is calculated and how it can apply to other betting situations.

When I say a "standard bet", I mean one that can only have two outcomes: win or lose. Also, in the event of a loss, you'd lose the full stake amount (there's no partial money back going on here).

The formula to work out the optimal Kelly stake (S) is as follows:

This can look a little complicated at first, so let's go through it step by step with an example to show how you take all the information and calculate the stake size. I'll use the same example as the section above:

This would be a great value bet to place if the bookie was offering odds of 5.0, but you believed that the true chance of that bet winning was more like 25%.

Step 1: Subtract 1 from the odds. 5 - 1 = 4

Step 2: Multiply this by the probability of the bet winning. 4 x 0.25 = 1

Step 3: Subtract the probability of the bet losing. 1 - 0.75 = 0.25

Step 4: Multiply by the bankroll amount. 0.25 x £1,000 = £250

Step 5: Divide this by the "odds - 1". £250 / 4 = £62.50

So we now know that the stake size that maximises the expected long term bankroll growth is £62.50. You can now apply the fractional Kelly as mentioned in the previous section.

It'd be as simple as taking the £62.50 and dividing it by 4 (or whatever other fraction you deem sensible). £15.62 is the new stake amount after doing this. It'd be a good idea to round this up/down to £15 or £20 so you don't stand out like a sore thumb to the bookie.

Each way bets work a little differently to your usual bet. They're essentially two bets in one. One of these bets on the selection to win, and the other bet on the selection to place (e.g. finish 1st - 4th).

This leads to three possible payouts instead of the standard bet, which gave two:

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