A risk of ruin calculator answers the question every winning gambler should ask before they worry about anything else: how likely am I to go broke before my edge shows up? Hit 55% at -110 and you have a real edge, about 5% per bet. With a 50-unit bankroll your risk of ruin is around 0.4%. Cut that to 20 units and it climbs past 10%. Same skill, very different odds of survival. The calculator above is free and works two ways.
Two ways to use the risk of ruin calculator
Sports bets. Enter your win rate, your typical odds and your bankroll in units (bankroll divided by your stake). The calculator works out your edge and the variance of each bet for you.
Poker or blackjack. Enter your win rate and standard deviation over the same period (per hour, or per 100 hands) and your bankroll in money. A tracker like Hold’em Manager gives you both numbers for poker. For blackjack card counters, the SD is usually around 1.1 to 1.2 bets per hand times the square root of hands played.
The maths
Risk of ruin ≈ e^(−2 × edge × bankroll ÷ variance) Bankroll for risk r = −ln(r) × variance ÷ (2 × edge)
This is the standard approximation, accurate when each bet is small next to the bankroll. It also assumes your edge is what you think it is. That’s the real danger: overestimate your win rate by a couple of points and the true risk of ruin can be many times higher than the number on screen. Most pros size for 5% or less on a conservative estimate.
With no edge the answer is always 100% eventually. A bigger bankroll only means it takes longer. If you’re checking whether a casino game can be beaten by money management, the expected loss calculator is the more honest tool. For stake sizing on a positive edge, see the Kelly calculator and the betting bankroll calculator.
Bet with money you can afford to lose. If it stops being fun, BeGambleAware.org is free and confidential.