Risk of Ruin Calculator
The chance a bankroll gets wiped out — from your edge, your swings and how many units you hold.
77.9%bankroll far too small
- Bankroll for 5% risk
- 600 u
- Bankroll for 1% risk
- 922 u
- Your bankroll
- 50 u
Ruin risk falls exponentially as the bankroll grows: each extra chunk of units cuts the probability by a constant factor. That is why bankroll requirements scale with your variance, not just your edge.
Risk of ruin is the probability that a run of bad luck drains your entire bankroll before your edge ever gets the chance to compound. It depends on three things: how big your edge is, how wild the swings are around that edge, and how many betting units your bankroll represents.
For an advantage player with a known win rate and standard deviation, the continuous approximation is RoR = e^(−2 · edge · bankroll / variance). Doubling the bankroll squares the risk — a bankroll that gives a 10% risk of ruin gives about 1% at double the size. For a simple even-money bet won with probability p, the classic gambler's-ruin result is RoR = (q/p)^(units), and if p ≤ 0.5 ruin is certain given enough time.
The practical takeaway is that variance, not edge, sets how much bankroll you need. Two players with the same 2% edge can need very different bankrolls if one plays a low-variance game and the other chases big multipliers.
FAQ
- What is an acceptable risk of ruin?
- Professional gamblers typically size their bankroll for a risk of ruin between 1% and 5%. Recreational players who can reload have a higher effective tolerance, but anything above roughly 15% means the bankroll is too small for the stakes.
- Does a positive edge mean I can't be ruined?
- No. A positive edge makes eventual ruin less than certain, but with a finite bankroll there is always some probability that variance takes you to zero first. The calculator quantifies exactly that probability.
- How is this different from the Kelly criterion?
- Kelly tells you the bet size that maximises growth for a given bankroll. Risk of ruin tells you the probability of going broke at a given bet size. Betting full Kelly implies a specific, and fairly high, lifetime risk of deep drawdowns.
Read up
- Bankroll Management for Bettors: Unit Sizing, Staking and DownswingsHow to set a bankroll, size a betting unit, choose between flat and percentage staking, and survive the losing runs that a real edge still goes through.
- The Kelly Criterion Explained (and Why Most People Use Half)What the Kelly criterion is, the formula for the optimal bet fraction, why full Kelly is so punishing in practice, and how fractional Kelly trades a little growth for far smaller swings.