Risk of Ruin
The probability of losing your entire bankroll, even with a positive edge.
Risk of ruin calculates the probability that you'll go completely broke given your edge, bet size, and bankroll. Even profitable bettors face risk of ruin if they bet too large a percentage of their bankroll.
The key insight is that risk of ruin drops dramatically as your bankroll grows relative to your bet size. A bettor with a 5% edge risking 10% of their bankroll per bet has a much higher risk of ruin than one risking 2% per bet with the same edge.
This is why bankroll management is not optional for serious gamblers. The math is clear: without proper bankroll sizing, even a winning strategy can result in going broke.
Related Terms
Bankroll Management
The practice of managing your gambling funds to minimize the risk of going broke.
Kelly Criterion
A formula for calculating the optimal bet size to maximize long-term bankroll growth.
Variance
The measure of how much results deviate from the expected outcome in the short term.
Unit
A standardized bet size used to track performance, typically 1-2% of your bankroll.
Top Sportsbooks
Top-rated platforms reviewed by our editorial team